All sizeable towns have at least one (usually small) furniture factory. The output is £11.8 million. Over 70 per cent of the furniture is made of wood, from 19 million bd. ft. of local timbers (rimu, tawa, Southland silver beech, and radiata pine); but some imported decorative timbers and fancy imported plywoods and veneers are used. Steel office furniture, venetian blinds, and wire and innerspring and soft-filled mattresses are also manufactured.

Sawmilling, with an average-sized unit of 11 persons, employs 5,900 workers and produces 617 million bd. ft. of rough-sawn timber, valued at £20.6 million. Exotic pines and the native rimu form most of the timber sawn, nearly 60 per cent of which is produced in the Auckland Province from the native forests of the King Country and the native and exotic forests of the Bay of Plenty. There are over 5,800 persons engaged in planing mills and joinery factories with an output of £24.2 million. These operate in or near towns, with three-quarters of the mills in the North Island. Other units manufacture wooden containers for the export trade, plywood, veneers, turnings, handles, dowelling, mouldings, and various household utilities.

This group, which employs over 26,000, manufactures footwear (excluding rubber footwear), clothing, gloves, hats, apparel accessories, canvas goods, and many other made-up textile goods. Over 40 per cent of the total workers are employed in Auckland.

Clothing: Over 19,000 people are employed in clothing manufacture. Nearly one-third of the clothing made (output £357 million) is manufactured from the customer's own materials (that is, on a “cut, make, and trim” basis). Many well-known overseas brands are manufactured under licence. Manufacture is spread throughout the country. There are many small units, with Auckland the main centre.

Footwear (Other than Rubber Footwear): The output of £123 million of this long-established industry includes footwear made under licence from overseas manufacturers of well known brands. Manufacture is chiefly in the four main centres where there are large well equipped factories.

Employment in this industry, which uses mainly domestic raw materials, is divided thus: wool scouring, 450 persons; woollen milling, 3,680; hosiery and other knitting, 4,200; other spinning and weaving, 1,840; processing of phormium and linen flax, 190; and manufacture of other textile goods, 720.

Wool Scouring: This industry produces, mainly for export, 55 million pounds of scoured wool, 94 per cent of which is scoured on commission. Only 7 per cent of the £14.2 million output is value added in manufacture.

Woollen Mills: These mills are not highly specialised and generally carry out all the processes (including scouring) of converting domestic raw wool into finished products (woollen and worsted yarns and cloths). Imports of cloths and yarns supplement the limited range produced by the mills. The 10 mills in Canterbury and Otago, employing 2,700 persons, produce the greater part of the £7.7 million output. Nearly half the workers in the total of 21 mills are women.

Knitting Mills: These mills are also not highly specialised, except for women's hosiery. Goods to the value of £11.4 million are produced by the 81 units and include women's hosiery, other socks and stockings, and knitted outerwear, underwear, and fabrics. Some units spin their own yarn; others, particularly the small units, have in the past used imported yarn. Over 60 per cent of the output comes from North Island mills. Two-thirds of the staff are women.

Other Spinning and Weaving Mills: The output of £7.2 million from the 17 factories includes carpets, rugs, mattings, rope, and woolpacks. Half the output comes from the South Island.

Manufacture: In 1962–63 four factories manufactured cigarettes and tobacco at Auckland, Napier, Lower Hutt, and Wellington. In April 1964 there were only two factories – one at Napier and one at Lower Hutt. By regulation, 30 per cent of the tobacco leaf processed must be of New Zealand origin, but for some years the manufacturers have exceeded this percentage. In 1962–63, 50 per cent of the leaf was grown in New Zealand. The neutral New Zealand leaf is well suited to blending with imported tobacco. The value of the output, excluding excise duty, is over £8.9 million.

Meat: There are 37 main works primarily engaged in meat freezing and preserving for export. They are well spread over New Zealand at or near ports or in the districts which supply stock for killing. This, the largest single industry, employs over 19,000 persons and has an output valued at £128.2 million, 60 per cent of which comes from the North Island. Smaller units cure ham and bacon worth £10.1 million for local use and export.

Dairy Produce: Two-thirds of the 234 butter and cheese factories and 77 other milk-products factories, which employ 4,600 people, employ 10 persons or less. This is a result of limited transport when the industry first started. With the growth of motor transport and, in recent years, the use of the milk tanker, the trend is for dairy factories to grow in size and for small units to amalgamate. Dairy factories are in the main owned cooperatively by the farmers who share in the total proceeds of the final sale of manufactures. The value of production was £58.4 million for butter and £16.8 million for cheese. The output of the “other milk products”, casein, £4.6 million, and condensed and powdered milks, infants' foods, etc., was £7.6 million.

Fruit and Vegetable Preserving: The 35 factories engaged for the most part in preserving and quick freezing fruit and vegetables and manufacturing sauces, pickles, jams, and conserves (output, £9.8 million) have generally been established close to their source of supplies. Nearly half of the 2,200 workers are women.

Other Food Manufacturing: Most of the raw materials used in the rest of the food-manufacturing industries are imported. Significant subgroups are: grain milling, £6.3 million; biscuit making, £4.1 million; and cocoa, chocolate, and sugar confectionery, £6.9 million. These units employ 920, 1,170, and 2,000 persons respectively, and they produce flour, 215,000 short tons; biscuits, 18,000 tons; and chocolate and sugar confectionery, 18,800 tons. About two-thirds of the biscuits and confectionery workers are women. Grain mills are located mainly in Auckland, Canterbury, and Otago Provinces. The largest biscuit factories are in Auckland, Lower Hutt, Christchurch, and Dunedin. Cocoa, chocolate, and sugar confectionery are manufactured chiefly at Auckland, Dunedin, and Christchurch. There is a large sugar refinery at Chelsea, Auckland. Most of the wide range of other food preparations are made in Auckland and Christchurch.

Beverages: The 17 breweries for ale and stout, employing 1,300 persons, have an output of 52.4 million gallons (99 per cent ale) valued at £9.8 million (excluding excise duty). Most of the malt for the breweries is made in Canterbury. Aerated waters and cordials are manufactured by small units mainly in the North Island. Wine making is mainly confined to Auckland and Hawke's Bay and cider is made at Nelson.

For some time past it has been argued that, in order to improve the quality of New Zealand manufactured goods, both for domestic sale and for export, an Industrial Design Council should be set up. In June 1965 the Government announced its intention to do this by legislation which would probably be introduced towards the close of the 1965 session.

by Henry Curran Holden, M.A., Director, Trade Relations and Economics Division, and Economist, Department of Industries and Commerce, Wellington.

(a) Employment: At 30 April 1964 the New Zealand labour force amounted to 956,500 workers. Of these, 256,000 (or nearly 27 per cent of the total) were employed in manufacturing industries. By comparison, primary industries then employed 134,000 workers or 15 per cent of the labour force. The manufacturing labour force was distributed within the main industrial groups thus:

The manufacturing industries, besides employing labour; use many of the various other community services: transport and communication, distribution and finance, and administrative and professional. These services employed 406,400 workers at 30 April 1964. In recent years the manufacturing industry has played an important part in keeping up the demand for labour necessary to the Government policy of full employment. Factories also provide much of the national income. The last available estimates (1963–64) showed that factories then earned 25 per cent of the national income.

(b) Capital: At 31 March 1963 the value of land, buildings, plant, and machinery of the 9,034 factories in the official Factory Production Statistics amounted to £317,360,475. Existing factories' capital expenditure on fixed assets during the year amounted to £49,373,000. Figures for the fixed capital expenditure of units not yet in production were not available, but would be substantial. The latest detailed figures for individual industries are available up to 31 March 1963. These showed that the food-manufacturing industries were still by far the largest in terms of fixed capital assets, having 22.5 per cent of the total. Other major industrial groups were: transport equipment, 9.6 per cent; paper and paper products, 11.8 per cent; wood and cork, 5.8 per cent; footwear, other wearing apparel, and made-up textile goods, 5.5 per cent; non-metallic mineral products, 5.5 per cent; and chemicals and chemical products, 5.3 per cent.

(c) Production: In 1962–63 there were 9,034 establishments included in the survey of factory production, which is compiled each year by the Department of Statistics. It is estimated that about 80 per cent of all factories, including all the more important, are in the survey. These factories employed 191,515 workers and the value of output was £840,622,310. Added value – that is the value of the output less the cost of the materials used in production – amounted to £337,740,892 and wages paid were £169,927,222. All of these figures were much higher than those in any previous year, added value, for example, being 6·2 per cent higher than in the previous year and volume of production higher by 4·5 per cent.

The most important industrial group was still that of food processing, the value of output being £276,515,000, and added value, £67,248,000. Manufacturing or repairing transport equipment was next with value of output of £87,998,000 in 1962–63. Wood-products manufacture, footwear and other apparel, textiles, and paper products were also important. The volume indexes of production in the various groups show that significant increases over the previous year were recorded by paper and paper products (18·3 per cent), electrical machinery and appliances (10 per cent), and beverages (9·5 per cent).

(d) Size and Location: Although the manufacturing industry is by now a most important sector of the economy, the average industrial unit is small. In 1962–63, 61 per cent of the 9,034 factories surveyed employed 10 workers or fewer. At the other end of the scale only 134 factories employed more than 200 workers. These larger factories were, in terms of output and value added per worker, the most efficient. This emphasises one of the difficulties of New Zealand manufacturing: most of the units have not developed to the size necessary for most efficient operation. No doubt difficulties of getting capital, the small size and fragmented nature of the market, and, possibly, the lack of desire of the management of the small family-controlled firm to develop beyond a certain size, contribute to this restriction on the growth of factory units.

The location of New Zealand industry has been very largely determined by the distribution of population: more so perhaps than in most countries, because of the fragmented and widespread nature of communities and the need for the earlier industries to supply the local market. Thus the Auckland provincial district in 1962–63 had 3,818 of the 9,034 factories surveyed; Wellington, 1,836; Canterbury, 1,306; and Otago, 919. There is little sign that any industrial group finds an area unsuitable for physical reasons; but areas of high and concentrated population naturally attract new industries. Each industrial group – as distinct from individual industries – has one or more factories in Auckland and Wellington; Canterbury and Otago have factories of every group, except tobacco manufacture.

The ratio of factories to population is also very similar in most districts. Auckland has 40 per cent both of population and of factories; Canterbury has 14 per cent of both. Wellington, however, has a higher percentage of factories than population, no doubt because it is a good centre for national industries – that is, those industries which are so big that they need a national rather than a small, provincial market. Thus Wellington has the main tobacco, vehicle-assembly, and soap plants because it is the best centre for the distribution of these products.

There are recent indications, however, that both Government and private interests favour decentralisation as a positive policy. A £20 million oil refinery has been established at Marsden Point, near Whangarei. The major units in the pulp and paper industry were established near the supplying forests at Kawerau, Tokoroa, and Kinleith. Nevertheless, market attractions and availability of labour are the factors which still have the greatest influence, and in the last seven years three out of each five extra jobs provided by the manufacturing industries have been in the Auckland district.

(e) Export of Manufactures: The export of manufactured goods needs to be briefly touched on in this survey. Paper pulp and newsprint are the largest and the best known. Other products include biscuits, confectionery, invalid foods, alcoholic and non-alcoholic beverages, electrical, agricultural, and dairy machinery, transport equipment, travel goods, clothing, scientific, optical and time instruments, leather manufactures, rubber products, chemical elements and compounds, and a number of other products. The number of manufactured export products is growing every year. On the basis of New Zealand's industrial policy, the capacity of manufacturing to provide more and more products both for local use and for export will be thoroughly tested.

The most recent trends in the development of manufacturing have again been greatly affected by the old problem of balance of payments. During the last part of 1957 export prices (particularly for dairy products) fell alarmingly, while at the same time the level of importing was very high. The consequent drain on the country's overseas exchange reserves made necessary the imposition in January 1958 of much tighter exchange control and import selection, accompanied by stringent steps to restrain demand and by heavy overseas borrowing. Renewed emphasis was placed on industrialisation, not only to produce internally what the country could not, in the short term, afford to buy from abroad, but also in an attempt to reduce the vulnerability of relying for export income on a few farm products – a fact that was becoming widely recognised. Greater diversification was seen as at least a partial answer, since it would expand the range of export goods. Development in depth was also needed; a concept entailing the importation of raw materials or partly finished goods so that goods made in New Zealand for the home market would have the greatest local content and so enable more goods to be available to the New Zealand market for a given expenditure of foreign exchange than would otherwise be the case. Similarly, the aim with exported products was the manufacturing or processing of the country's own raw materials or products as much as possible before export so that the greatest amount of foreign exchange could be earned.

These policies implied that the manufacturing industry should be helped to develop as quickly as possible. One of the major and significant steps taken by the Government was to call an Industrial Development Conference in the middle of 1960 to give representatives of the main organisations concerned with economic development the chance to discuss the methods needed and the obstacles to be removed if industry were to be developed quickly and effectively. That New Zealand had already taken considerable steps to diversify and develop its manufacturing industries was well shown by a schedule prepared for the conference. This set out details of new manufacturing projects and development of existing projects, which had started in New Zealand between January 1958 and June 1960 or for which firm plans had been made during that time. The schedule covered most of the projects that had taken place or were to come. These included over 240 new or expanded projects, with new capital investment of approximately £73 million and additional annual production of about £68 million once the projects were all in operation.

Again the trend noted earlier was repeated. Most of the new projects were based on imported materials; the development or expansion of existing industries was usually based on local materials. Among the most important projects were an oil refinery, great expansion of the pulp and paper industry, plans for substantial increases in the New Zealand content of motor vehicles, and the production of motor scooters in New Zealand. New products included fork-lift trucks, marine jet engines, television receivers and tubes, plastic footwear, wire ropes, aluminium extrusions, merchant bars, self-adhesive tapes and labels, wallpaper, instant coffee, and gin. Some industries expanded significantly: woollen piecegoods and blankets, carpets, knitwear, hosiery, beverages, milk-powder compounds, animal vaccines, synthetic resins, metal windows, plaster board, asbestos-cement pipes, sliding-door gear, electric steam irons, and pop-up toasters. The trend of new developments in manufacturing industries has been continued.

Though the ending of the war quickly reduced the demand for defence equipment, it did not greatly reduce the demand on New Zealand industrial production, owing to a world shortage of manufactured goods. Full employment was maintained, the level of internal demand was still high. Import licensing was continued after the war. But it is probably true to say that the rate of manufacturing expansion up to 1950 would not have changed whether import licensing had existed or not. Post-war shortages ended about the beginning of the fifties. In 1950 much of New Zealand's import-control structure was dismantled.

The war in Korea and the generally good prices for export goods such as wool, which continued through the middle fifties, brought unprecedented prosperity. Despite this, there were violent fluctuations in prices and the balance of payments problem remained. Nevertheless, Government policy allowed as much free importing as was compatible with the needs of preserving balance of payments. This policy created difficulties for some manufacturing industries and a few industries (those making vacuum cleaners and domestic irons, for example) almost disappeared. But the country's prosperity, based on high export returns and sustained investment expenditure, kept the internal level of demand for manufactures high. Capital expenditure was high; population was increasing rapidly. Thus, between 1949–50 and 1954–55, the volume of industrial production rose by over 30 per cent – as much as it had done during the war. By 1954–55 there were 8,366 factories in operation, employing 153,500 workers, with an output of £550,790,000 (contrast the £195,300,000 at the end of the war). £185,400,000 of this figure was value added in manufacture. It must be remembered, however, that there had been a considerable rise in prices in the decade following the war. The value of fixed assets – land, buildings, plant, and machinery – in 1954–55 was estimated at £138,500,000. Growth in output was not the only significant feature of the period; the pattern of manufacturing changed as well. The food industries – mainly those processing export products – increased the volume of output at a relatively slow rate; but they still, in 1954–55, accounted for over 40 per cent of the total value of manufacturing. Production in the leather industry fell and the footwear, other wearing apparel, and made-up textile goods increased by only 16 per cent. The rubber industry made a significant 120-per-cent increase. The paper-products industry had just begun its spectacular growth, with a 100-per-cent production increase in the five years. The most significant increase came in the engineering industry. This was stimulated by the development of other manufacturing industries, mechanisation of the farms, the development programme of New Zealand generally, the growth of building and construction, and the demand for consumer durables. But, above all, the engineering industry increased because it was one of the first in New Zealand to recognise the need for advanced technical training to ensure that the industry would be able to maintain its technical progress and overall development.

The period 1954–55 to 1956–57 saw manufacturing industries increase production, take on more workers, and consolidate rather than bring in major new developments. By 1957 the terms of trade were again a cause for concern, but a fairly liberal importing policy was being followed. As a result, some industries (for example, tobacco manufacture, the leather and leather products, other than footwear and apparel) decreased their volume of production. The pulp and paper industry developed spectacularly to increase output of chemical and mechanical pulp, kraft paper, newsprint, tissues, and other papers. Others worthy of note were the reopening of the linseed processing factory at Dunedin; the starting of synthetic-resin production by two manufacturers; and the commercial manufacture of foam plastic. There were significant expansions in the fabrication of fibreglass and the manufacture of many fibreglass products. The fruit and vegetable industry (with quick-frozen products an important element) continued to expand.