Thursday November 24 2016
New Zealand Trade Deficit Narrows 6.4% YoY in October
Statistics New Zealand | Mojdeh Kazemi | mojdeh@tradingeconomics.com

New Zealand posted a trade gap of NZD 846 million in October of 2016, compared to a NZD 904 million deficit a year earlier and better than market expectations of NZD 950 million shortfall. It was the smallest gap recorded since July when the trade balance swung into deficit. Exports went up by 2.2 percent, due to higher sales of dairies. Imports rose by 0.2 percent, led by increase in purchase of capital goods.

Exports rose 2.2 percent year-on-year to NZD 3,897 million, due to higher sales of milk powder, butter, and cheese (+13 percent); logs, wood, and wood articles (+25 percent); fruits (+40 percent), while sales of meat and edible offal fell (-18 percent). Outbound shipments increased to China (+7.9 percent) and Japan (+12 percent), while export went down to Australia (-6.5 percent); the US (-3.2 percent) and the EU (-9.7 percent).

Imports went up slightly by 0.2 percent year-on-year to NZD 4,743 million, led by higher purchase of capital goods (+27 percent). In contrast, imports decreased for intermediate goods (-11 percent); consumer goods (-5.3 percent) and crude oil (-17 percent). Within the top import partners purchases rose to the EU (+1.4 percent); the US (+45 percent) and Japan (+16 percent), while imports fell to China (-10 percent) and Australia (-8.5 percent). 




Thursday November 10 2016
New Zealand Cuts Key Rate to 1.75%
RBNZ | Mojdeh Kazemi | mojdeh@tradingeconomics.com

The Reserve Bank of New Zealand lowered its official cash rate by 25 basis points to a fresh record low of 1.75 percent in November of 2016. The decision was widely expected by markets. Policymakers said the New Zealand dollar is high and inflation remains below the midpoint target of 2 percent.

Statement by Reserve Bank Governor Graeme Wheeler:


Significant surplus capacity exists across the global economy despite improved economic indicators in some countries. Global inflation remains weak even though commodity prices have come off their lows. Political uncertainty remains heightened and market volatility is elevated.

Weak global conditions and low interest rates relative to New Zealand are keeping upward pressure on the New Zealand dollar exchange rate. The exchange rate remains higher than is sustainable for balanced economic growth and, together with low global inflation, continues to generate negative inflation in the tradables sector. A decline in the exchange rate is needed.

Domestic growth is being supported by strong population growth, construction activity, tourism, and accommodative monetary policy. Recent dairy auctions have been positive, but uncertainty remains around future outcomes. High net immigration is supporting growth in labour supply and limiting wage pressure.

House price inflation remains excessive and is posing concerns for financial stability. Although house price inflation has moderated in Auckland, it is uncertain whether this will be sustained given the continuing imbalance between supply and demand.

Headline inflation continues to be held below the target range by ongoing negative tradables inflation. Annual CPI inflation was weak in the September quarter, in part due to lower fuel prices and cuts in ACC levies. Annual inflation is expected to rise from the December quarter, reflecting the policy stimulus to date, the strength of the domestic economy, and reduced drag from tradables inflation.

Monetary policy will continue to be accommodative. Our current projections and assumptions indicate that policy settings, including today’s easing, will see growth strong enough to have inflation settle near the middle of the target range. Numerous uncertainties remain, particularly in respect of the international outlook, and policy may need to adjust accordingly.




Tuesday November 01 2016
New Zealand Jobless Rate Falls to Nearly 8-Year Low in Q3
Statistics New Zealand | Joana Ferreira | joana.ferreira@tradingeconomics.com

New Zealand's unemployment rate fell to 4.9 percent in the third quarter of 2016 from a downwardly revised 5.0 percent in the previous quarter, better than market expectations of 5.1 percent. It was the lowest unemployment rate since the December 2008 quarter, as the number of unemployed declined by 2.2 percent while employment grew by 1.4 percent.

The unemployment rate fell to 4.9 percent in the September 2016 quarter (from a revised 5.0 percent in the previous quarter), Statistics New Zealand said today. This is the lowest unemployment rate since the December 2008 quarter. There were 3,000 fewer people unemployed than in the June 2016 quarter and 10,000 fewer over the year.

“The number of people employed in New Zealand was up 35,000, or 1.4 percent, in the September 2016 quarter,” labour and income statistics manager Mark Gordon said. “This strong growth in employment, coupled with fewer unemployed people, pushed the unemployment rate below 5.0 percent for the first time in nearly eight years.”

The working-age population increased by 24,000 people (0.7 percent) over the quarter, to reach 3,739,000.

“The increase in the number of people employed again exceeded population growth over the latest quarter. This resulted in the employment rate increasing 0.5 percentage points, so currently 66.7 percent of the working-age population is in some form of employment,” Mr Gordon said.

The rental, hiring, and real estate services industry had a significant increase in unadjusted employment over the quarter, with 5,000 more people employed. Significant increases for this industry occurred in the Auckland, Wellington, and Manawatu-Wanganui regions.

Over the quarter the underutilisation rate fell 0.5 percentage points, to 12.2 percent. This reflects 13,000 fewer people being underutilised. Underutilisation is a measure of potential labour supply and unmet needs for work. A fall in the number of female 'available potential jobseekers', (down 8,600) drove the decrease. These are people who are available and want to work, but are not actively seeking work.

Annual wage inflation, as measured by the labour cost index, increased to 1.6 percent. Private sector wage inflation remained at 1.6 percent while for the public sector it increased to 1.7 percent. The increase in the public sector was influenced by collective agreements for nurses, primary teachers, and the police. This had the effect of making wage inflation higher in the public than the private sector for the first time since the June 2010 quarter.




Wednesday October 26 2016
New Zealand Trade Gap Hits Record High in September
Statistics New Zealand | Yekaterina Guchshina | yekaterina@tradingeconomics.com

New Zealand trade deficit widened to NZD 1436 million trade deficit in September of 2016, compared to a NZD 1140 million shortfall a year earlier and above market expectations of NZD 1125 million gap. It was the biggest trade gap since the series started in 1951. Exports dropped by 5.7 percent, led by lower sales of meat and edible offal. Imports rose by 1.8 percent, driven by a growth in purchase of capital goods.

Exports dropped by 5.4 percent year-on-year to NZD 3,467 million, led by lower sales of meat and edible offal (-35 percent) and milk powder, butter, and cheese (-1.2 percent). Outbound shipments declined to Australia (-6.3 percent); the US (-19 percent); Japan (-19 percent); EU (-6.2 percent) while exports to China rose by 13 percent.

Imports rose by 1.8 percent year-on-year to NZD 4,902 million, mostly driven by a growth in purchase of capital goods (6.6 percent). Purchases went up from  the US (34 percent) and Japan (9 percent) while fell from China (-4.7 percent), EU (-9.2 percent) and Australia (-5.8 percent).


Monday October 17 2016
New Zealand Inflation Rate Eases to 0.2% in Q3
Statistics New Zealand | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in New Zealand increased 0.2 percent year-on-year in the third quarter of 2016, easing from a 0.4 percent rise in each of the previous two quarters and above market estimates of 0.1 percent. Housing-related prices made the biggest upward contribution, partially offset by a fall in transport cost.

Housing-related prices were the main upward contributor, influenced by purchase of newly built houses, excluding land (up 6.3 percent); with Auckland up 7.9 percent; rentals for housing (up 2.1 percent); with Auckland up 3.4 percent; local authority rates (up 3.4 percent) and property maintenance services like painting and plumbing (up 3.1 percent).
 
In contrast, cost declined for petrol (-11 percent); other private transport services (-28 percent); international air transport (down 11 percent); package holidays (-13 percent).
 
On a quarterly basis, consumer prices also rose 0.2 percent, easing from a 0.4 percent increase in the previous period. 




Monday September 26 2016
New Zealand Trade Gap Widens 16% YoY in August
Statistics New Zealand | Mojdeh Kazemi | mojdeh@tradingeconomics.com

New Zealand posted a NZD 1265 million trade deficit in August of 2016, compared to a NZD 1090 million shortfall a year earlier and missing market expectations of NZD 766 million gap. Exports dropped by 8.7 percent, led by lower sales of milk powder, butter, and cheese. Imports fell by 3.1 percent, driven by a cut in purchase of capital goods.

Exports dropped by 8.7 percent year-on-year to NZD 3,390 million, led by lower sales of milk powder, butter, and cheese (-22.2 percent), meat and edible offal (-26 percent). Outbound shipments declined to Australia (-0.3 percent); the US (-16.6 percent); Japan (-4.5 percent); United Kingdom (-12.4 percent) and South Korea (-27.4 percent) while exports to China rose by 2 percent.

Imports fell by 3.1 percent year-on-year to NZD 4,652 million, mostly driven by a cut in purchase of capital goods (45 percent). Meantime, imports also decreased for crude oil (-38 percent); aircraft and parts (-65 percent) and electrical machinery equipments (-6.2 percent). Purchases went down from China (-2.9 percent), the US (-34 percent), Thailand (-3.9 percent), while imports from Australia increased 11.1 percent.



Wednesday September 21 2016
New Zealand Leaves Key Rate Unchanged at 2%
RBNZ | Joana Taborda | joana.taborda@tradingeconomics.com

The Reserve Bank of New Zealand left its official cash rate steady at 2 percent at its September 2016 meeting. Policymakers said the New Zealand dollar is high and inflation remains below target so further policy easing will be required. The decision was widely expected by markets and follows a 25bps cut in August.

Statement by Reserve Bank Governor Graeme Wheeler:
 
Global growth is below trend despite being supported by unprecedented levels of monetary stimulus. Significant surplus capacity remains across many economies and, along with low commodity prices, is suppressing global inflation. Volatility in global markets has increased in recent weeks, with government bond yields rising and equities coming off their highs. The prospects for global growth and commodity prices remain uncertain. Political uncertainty remains.
 
Weak global conditions and low interest rates relative to New Zealand are placing upward pressure on the New Zealand dollar exchange rate. The trade-weighted exchange rate is higher than assumed in the August Statement. Although this may partly reflect improved export prices, the high exchange rate continues to place pressure on the export and import-competing sectors and, together with low global inflation, is causing negative inflation in the tradables sector. A decline in the exchange rate is needed.
 
Second quarter GDP results were consistent with the Bank’s growth expectations. Domestic growth is expected to remain supported by strong net immigration, construction activity, tourism, and accommodative monetary policy. While dairy prices have firmed since early August, the outlook for the full season remains very uncertain. High net immigration is supporting strong growth in labour supply and limiting wage pressure.
 
House price inflation remains excessive, posing concerns for financial stability. There are indications that recent macro-prudential measures and tighter credit conditions in recent weeks are having a moderating influence.
 
Headline inflation is being held below the target band by continuing negative tradables inflation. Annual CPI inflation is expected to weaken in the September quarter, reflecting lower fuel prices and cuts in ACC levies. Annual inflation is expected to rise from the December quarter, reflecting the policy stimulus to date, the strength of the domestic economy, reduced drag from tradables inflation, and rising non-tradables inflation. Although long-term inflation expectations are well-anchored at 2 percent, the sustained weakness in headline inflation risks further declines in inflation expectations.
 
Monetary policy will continue to be accommodative. Our current projections and assumptions indicate that further policy easing will be required to ensure that future inflation settles near the middle of the target range. We will continue to watch closely the emerging economic data.


Thursday September 15 2016
New Zealand GDP Advances 0.9% QoQ in Q2
Statistics New Zealand | Mojdeh Kazemi | mojdeh@tradingeconomics.com

New Zealand economy expanded a seasonally adjusted 0.9 percent in the second quarter of 2016, following an upwardly revised 0.9 percent gain the in previous quarter and missing market expectations of a 1.1 percent growth. Construction and services drove the expansion while mining contracted for the third quarter.

The services sector rose 0.7 percent (0.9 percent in Q1), boosted by rental, hiring and real estate activities (1.3 percent compared to 0.3 percent); retail trade and accommodation (1.9 percent compared to 1.4 percent); arts and recreation (1.8 percent compared to 0.5 percent) and health care and social assistance (1.3 percent compared to 2.7 percent). In contrast, activities fell for transport, postal and warehousing (-0.3 percent compared to 1.3 percent); information and telecommunications (-0.3 percent compared to 1.4 percent) and public administration and safety (-1.2 percent compared to 0.9 percent).

The construction sector surged 5 percent (5.1 percent in Q1), manufacturing rebounded (0.8 percent compared to -0.3 percent) and agriculture expanded at a faster 1.4 percent (0.7 percent in Q1). In contrast, mining sharnk for the third straight quarter (-2.5 percent) and utilities output declined 0.3 percent (1.7 percent in Q1).

Year-on-year, the economy advanced 3.6 percent in the June quarter of 2016, following an upwarldly revised 3 percent growth in the previous period.




Wednesday September 14 2016
New Zealand GDP Advances 0.9% QoQ in Q2
Mojdeh | mojdeh@tradingeconomics.com

New Zealand economy expanded a seasonally adjusted 0.9 percent in the second quarter of 2016, following an upwardly revised 0.9 percent gain the in previous quarter and missing market expectations of a 1.1 percent growth, driven by construction and services sector.

The services sector rose 0.7 percent in the June quarter of 2016, mostly due to a 1.3 percent growth in rental, hiring, and real estate services and a 1.9 percent exansion in retail trade and accommodation. Construction advanced 5 percent, manucaturing rose 0.8 percent and agriculture exanded by 1.4 percent. 

The expenditure measure of GDP increased to 1.2 percent in the three months to June, following an uwardly revised 0.7 percent growth in the first quarter. Exports rose 4 percent and imports went up 2.6 percent. Household spending increased 1.9 percent, while investment in residential building; transport equipment; and plant, machinery, and equipment jumped 3.1 percent.

Year-on-year, the economy advanced 3.6 percent in the June quarter of 2016, following an upwarldly revised 3 percent growth in the previous period.


Wednesday September 14 2016
New Zealand GDP Advances 0.9% QoQ in Q2
Mojdeh | mojdeh@tradingeconomics.com

New Zealand economy expanded a seasonally adjusted 0.9 percent in the second quarter of 2016, following an upwardly revised 0.9 percent gain the in previous quarter and missing market expectations of a 1.1 percent growth, driven by construction and services sector.

The services sector rose 0.7 percent in the June quarter of 2016, mostly due to a 1.3 percent growth in rental, hiring, and real estate services and a 1.9 percent exansion in retail trade and accommodation. Construction advanced 5 percent, manucaturing rose 0.8 percent and agriculture exanded by 1.4 percent. 

The expenditure measure of GDP increased to 1.2 percent in the three months to June, following an uwardly revised 0.7 percent growth in the first quarter. Exports rose 4 percent and imports went up 2.6 percent. Household spending increased 1.9 percent, while investment in residential building; transport equipment; and plant, machinery, and equipment jumped 3.1 percent.

Year-on-year, the economy advanced 3.6 percent in the June quarter of 2016, following an upwarldly revised 3 percent growth in the previous period.