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Graphic: An Encyclopaedia of New Zealand 1966.

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This information was published in 1966 in An Encyclopaedia of New Zealand, edited by A. H. McLintock. It has not been corrected and will not be updated.

Up-to-date information can be found elsewhere in Te Ara.

INDUSTRIAL DEVELOPMENT

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Post-war Development

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.


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