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War Economy

Levels of Production

Levels of Production

In spite of exceptions, such as railway transport and electricity supply, the general tendency was for services to the public and to industry to be reduced during the war, while the rate of production of commodities increased more slowly than in normal times.

Apart from hospitals and some of the special services already discussed, most services received comparatively low priority for manpower purposes during the war and, since service industries tend to be labour intensive,1 this usually curtailed their activities fairly effectively.

A number of service industries were declared essential, but

1 That is, they require a comparatively large amount of labour (and often a comparatively small amount of capital) to produce a given output.

page 440 generally they did not receive the degree of protection which was accorded to farming, coal mining, manufacturing and many other industries. There is no year to year record of the effects of manpower policy on the servicing industries, but an indication of their comparative lack of protection can be derived from records of the numbers withheld from service on occupational grounds.

In August 1945 there were still 21,600 Grade I men1 aged under 36 who were withheld from military service on occupational grounds.2 Only 7 ½ per cent of these men were in servicing industries,3 but these same industries normally employed no less than a quarter of the entire male labour force.

The National Service Department listed wholesale and retail trade, land and estate and other agencies, finance and insurance among industries which were not declared essential. Of the non-essential industries the Department wrote:4

‘These industries and services all play their part in the economy of the Dominion and in the life of our people, and have varying degrees of importance. It was not necessary, however, to grant them the protection of a declaration of essentiality, as in practically all cases the production or service could be curtailed if necessary without impeding the war effort. It was the aim of the Department throughout, in the administration of manpower controls in these industries and services to permit them, as far as possible, to maintain sufficient staff to continue to function economically and thus be in a position, after the war, to rehabilitate employees who had entered the Forces. The Department assisted these industries and services from time to time by arranging the release of home servicemen and home servicewomen from the Forces where such action was deemed to be warranted. Armed Forces Appeal Boards in dealing with appeals, also permitted the retention from military services of limited numbers of Category “A” men holding key positions and a more substantial proportion of non-Category “A” men.5 The engagement of part-time labour, married women, and elderly persons was a prominent feature of the employment situation in these industries and services during the war period.’

In spite of shortages of fuel and power, and the tendency for most services to be curtailed during the war years, an increased

1 Men medically fit for service.

2 Parliamentary Paper H–11a, Report of the National Service Department, 1946, p. 126.

3 For purposes of this comparison, electricity supply and transport and communications are excluded from services.

4 H–11a, 1946, p. 57.

5 Category ‘A’ men were those who satisfied the age, fitness and other requirements for overseas service. (Author's footnote.)

page 441 volume of goods was produced with the depleted civilian labour force.

Chart 75 shows changes in the volume of production of goods.

chart of production statistics

Chart 75

Production changes in particular industries have been discussed in other chapters. Manufacturing–production, supported by an increasing labour force, rose progressively from year to year, but farm production fluctuated and, though tending to increase, was largely responsible for the occasional downturns in total production of goods. Building and other production also fluctuated.

Between 1938–39 and 1944–45 manufacturing output increased at an average rate of 4 3/4 per cent a year, farm production increased at 2 1/4 per cent a year,1 while building and other production declined.2 Production of all commodities increased 2 1/4 per cent a year on average.

At first glance these rates of growth look poor by comparison

1 Dairy factories, freezing works and other industries processing farm products are included with farming, for purposes of this analysis. On pp. 177–80 they were left with manufacturing.

2 The building and construction industry lost ground, in spite of wartime pressure for defence construction work. See also Chapter 9, especially pp. 244–5, dealing with manpower.

page 442 with other periods. As indicated,1 the long-term rate of growth of volume of production of goods in New Zealand is close to 4 per cent a year. However, wartime production increases were achieved with a depleted civilian labour force; some types of materials and equipment were at times unprocurable, fuel and power tended to be in short supply, and many other services were restricted because of manpower scarcity. Taking these influences into consideration, the rate of increase in production was remarkably good.

1 p. 424.