Thursday March 23 2017
New Zealand February Trade Deficit Largest Since 2007
Mario | mario@tradingeconomics.com

New Zealand posted a trade deficit of NZD 18 million in February of 2017 compared to a NZD 366.9 million surplus in the same month of the previous year. It was the biggest trade deficit for any February since 2007 and was well below expectations of a NZD 160 million surplus. The annual trade deficit for the year ended February 2017 was $3.8 billion, the largest since April 2009.

Exports fell 5.5 percent year-on-year to NZD 4.00 billion in February, mainly affected by a 98.8 percent fall in ships, boats & floating structures. The largest component, meat & edible offal rose by 4.4 percent (from +2.7 percent in January). The second largest component, logs, wood & wood articles fell 1.7 percent (from -4.0 percent). Shipments increased to China (6.3 percent from +12.3 percent in January) and Australia (2.1 percent from +12.8 percent in January), but declined to the EU (9.6 percent from -25.9 percent), South Korea (9.0 percent from -34.8 percent), Japan (5.7 percent from -10.6 percent), and the United States (3.0 percent from -6.1 percent).

Meanwhile, imports increased by 4.0 percent to NZD 4.02 billion, led mainly by a 20.3 percent increase in vehicles, parts & accessories (from +28.3 percent in January), and a 32.0 rise in petroleum & products (from +52.6 percent). Imports increased from Japan (6.3 percent from +39.7 percent in January) and the EU (2.9 percent from +0.6 percent). Shipments declined from China (10.2 percent), Australia (9.2 percent), and the United States (2.5 percent). 




Wednesday March 22 2017
New Zealand Holds Interest Rate At 1.75%
Mario | mario@tradingeconomics.com

The Reserve Bank of New Zealand kept its official cash rate unchanged at record low of 1.75 percent on March 22nd, 2017, as widely expected. The central bank left the monetary rate unchanged for the fourth straight meeting. Policymakers underscored that headline inflation has returned to the target band as past declines in oil prices dropped out of the annual calculation; that quarterly GDP was weaker than expected in the December quarter; and that global inflation has increased. They also reiterated that monetary policy will remain accommodative for a considerable period, as numerous uncertainties remain, particularly in respect of the international outlook, and policy may need to adjust accordingly.

Statement by Reserve Bank Governor Graeme Wheeler:

The Reserve Bank today left the Official Cash Rate (OCR) unchanged at 1.75 percent.

Macroeconomic indicators in advanced economies have been positive over the past two months.  However, major challenges remain with on-going surplus capacity in the global economy and extensive geo-political uncertainty.

Global headline inflation has increased, partly due to a rise in commodity prices, although oil prices have fallen more recently. Core inflation has been low and stable. Monetary policy is expected to remain stimulatory, but less so going forward, particularly in the US.

The trade-weighted exchange rate has fallen 4 percent since February, partly in response to weaker dairy prices and reduced interest rate differentials. This is an encouraging move, but further depreciation is needed to achieve more balanced growth.

Quarterly GDP was weaker than expected in the December quarter, but some of this is considered to be due to temporary factors. The growth outlook remains positive, supported by on-going accommodative monetary policy, strong population growth, and high levels of household spending and construction activity. Dairy prices have been volatile in recent auctions and uncertainty remains around future outcomes.

House price inflation has moderated, and in part reflects loan-to-value ratio restrictions and tighter lending conditions. It is uncertain whether this moderation will be sustained given the continued imbalance between supply and demand.

Headline inflation has returned to the target band as past declines in oil prices dropped out of the annual calculation. Headline CPI will be variable over the next 12 months due to one-off effects from recent food and import price movements, but is expected to return to the midpoint of the target band over the medium term. Longer-term inflation expectations remain well-anchored at around 2 percent.

Monetary policy will remain accommodative for a considerable period. Numerous uncertainties remain, particularly in respect of the international outlook, and policy may need to adjust accordingly.




Wednesday March 15 2017
New Zealand GDP Growth Slows More Than Expected in Q4
Statistics New Zealand | Joana Taborda | joana.taborda@tradingeconomics.com

The New Zealand economy advanced 0.4 percent on quarter in the last three months of 2016, slowing from a downwardly revised 0.8 percent growth in the previous period and below market expectations of 0.7 percent. It is the smallest expansion in six quarters, as services slowed and agriculture and manufacturing contracted.

Services was the main driver of GDP growth and rose 0.7 percent (1.1 percent in Q3). Business services went up 1.7 percent (2.6 percent in Q3) due to computer system design and related services and advertising, market research and management services. Retail trade increased 0.6 percent (0.7 percent in Q3); arts, recreation, and other services increased 3.8 percent (2.5 percent in Q3), with repair and maintenance services the largest contributor. In contrast, wholesale (-0.3 percent compared to 1.3 percent in Q3) and transport, postal and warehousing (-0.7 percent compared to 3.7 percent in Q3) contracted.
 
Agriculture was down 0.8 percent (-2.9 percent in Q3), due to falling milk production and manufacturing fell 1.6 percent (1.2 percent in Q3), due to decreased food, beverage, and tobacco production.
 
Annual GDP growth for the year ended December 2016 increased to 3.1 percent from 2.5 percent in 2015.




Tuesday February 28 2017
New Zealand Trade Balance Swings To Deficit in January
Mario | mario@tradingeconomics.com

New Zealand posted a trade gap of NZD 285 million in January of 2017 compared to a NZD 12 million surplus in the same month of the previous year. It was the biggest deficit for any January since 2013 and was well above expectations of a NZD 3 million gap.

Exports edged up 0.3 percent year-on-year to NZD 3.91 billion, led by rebounds for milk powder, butter, and cheese (4.5 percent from -2.9 percent in December), and meat and edible offal (2.7 percent from -13.0 percent). In contrast, exports declined for logs, wood, and wood articles (-4.0 percent from 17.0 percent). Fruits exports increased at a softer pace of 16.8 percent (from 19 percent in the previous month). Shipments increased to Australia (12.8 percent) and China (12.3 percent), but declined to South Korea (-34.8 percent), the EU (-25.9 percent), Japan (-10.6 percent), and the United States (-6.1 percent).

Imports surged 8.0 percent to NZD 4.19 billion in January, led by petroleum and products (+52.6 percent from +5.3 percent); vehicles, parts, and accessories (+28.3 percent from +15.0 percent); and electrical machinery and equipment (+14.8 percent from -2.6 percent). Imports increased from Japan (+39.7 percent), the United States (+13.8 percent), and the European Union (+0.6 percent). Shipments from Korea (-4.9 percent), Australia (-2.2 
percent), and China (-0.5 percent) declined. 


Wednesday February 08 2017
New Zealand Holds Key Rate At 1.75%
RBNZ | Yekaterina Guchshina | yekaterina@tradingeconomics.com

The Reserve Bank of New Zealand kept its official cash rate unchanged at record low of 1.75 percent on February 8th, 2017, as widely expected. Policymakers said financial conditions have firmed with long-term interest rates rising and continued upward pressure on the New Zealand dollar exchange rate. The exchange rate remains higher than is sustainable for balanced growth. Inflation has returned to the target band as past declines in oil prices dropped out of the annual calculation, and is expected to return to the midpoint target of 2 percent gradually, reflecting the strength of the domestic economy.

Statement by Reserve Bank Governor Graeme Wheeler:

The recovery in commodity prices and more positive business and consumer sentiment in advanced economies have improved the global outlook.  However, major challenges remain with on-going surplus capacity in the global economy and rising geo-political uncertainty.

Global headline inflation has increased, partly due to rising commodity prices.  Global long-term interest rates have increased.  Monetary policy is expected to remain stimulatory, but less so going forward, particularly in the US.

New Zealand’s financial conditions have firmed with long-term interest rates rising and continued upward pressure on the New Zealand dollar exchange rate.  The exchange rate remains higher than is sustainable for balanced growth and, together with low global inflation, continues to generate negative inflation in the tradables sector.  A decline in the exchange rate is needed.

Economic growth in New Zealand has increased as expected and is steadily drawing on spare resources.  The outlook remains positive, supported by ongoing accommodative monetary policy, strong population growth, increased household spending and rising construction activity. Dairy prices have recovered in recent months but uncertainty remains around future outcomes.

Recent moderation in house price inflation is welcome, and in part reflects loan-to-value ratio restrictions and higher mortgage rates.  It is uncertain whether this moderation will be sustained given the continued imbalance between supply and demand.

Headline inflation has returned to the target band as past declines in oil prices dropped out of the annual calculation.  Inflation is expected to return to the
midpoint of the target band gradually, reflecting the strength of the domestic economy and despite persistent negative tradables inflation.  Longer-term inflation expectations remain well-anchored at around 2 percent.

Monetary policy will remain accommodative for a considerable period.  Numerous uncertainties remain, particularly in respect of the international outlook, and policy may need to adjust accordingly.


Wednesday February 01 2017
New Zealand Jobless Rate Rises To 5.2% In Q4
Statistics New Zealand | Luísa Carvalho | luisa.carvalho@tradingeconomics.com

New Zealand's unemployment rate increased to 5.2 percent in the fourth quarter of 2016 from 4.9 percent in the previous period, worse than market expectations of 4.8 percent. It was the highest jobless rate since the March quarter of 2016, as a large number of people entered the labour force and employment increased less than unemployment.

The number of unemployed persons rose by 7.6 percent or by 10,000 people to 139,000. Over the quarter 3,000 more men and 7,000 more women were unemployed. As a result, the unemployment rate for men increased to 4.8 percent (up 0.1 percentage points) and for women, to 5.7 percent (up 0.5 percentage points).

Employment went up by 0.8 percent or by 19,000 to 2.51 million people. This followed a 1.3 percent increase in employment in the September 2016 quarter. Full-time employment rose 1.6 percent, with an extra 32,000 people being employed full-time. In contrast, part-time employment fell 2.2 percent, down 12,000 people.

The retail trade, accommodation, and food services industry was the largest contributor to employment growth over the latest quarter. This was followed closely by the construction and the professional services industries.

The labour force participation rate increased 0.4 percentage points over the latest quarter, to reach an all-time high of 70.5 percent. The number of people participating in the labour force, at 2.649 million, increased by 1.1 percent (up 29,000 people), with both men and women contributing to this.

Annual wage inflation, as measured by the labour cost index, was 1.6 percent in the December 2016 quarter. Annual wage inflation has been 1.5 to 1.6 percent for the last seven quarters.




Sunday January 29 2017
New Zealand Trade Gap Narrows in December
Statistics New Zealand | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

New Zealand trade deficit declined 1.3 percent year-on-year to NZD 41 million in December of 2016. For the year ended December 2016, the annual trade deficit was NZD 3.2 billion, lower than a NZD 3.5 billion gap a year earlier.

Exports declined 0.9 percent year-on-year to NZD 4.4 billion. Meat and edible offal led the fall, down 16 percent, while milk powder, butter, and cheese rose 8 percent. For the year ended December 2016, sales went down 1.1 percent to NZD 48 billion, the second anual fall, led by milk powder, butter, and cheese (-2.9 percent) and meat and edible offal (-13 percent). In contrast, exports rose for logs, wood, and wood articles (17 percent) and fruits (19 percent). Shipments decreased to Australia (-0.9 percent), the US (-8 percent), the EU (-4 percent) and South Korea (-4.6 percent) but increased to China (9.1 percent) and Japan (0.8 percent).

Imports declined 0.9 percent to NZD 4.4 billion, as intermediate goods fell 2.5 percent and oil and gas were down 39 percent. Meanwhile, capital goods and consumption goods slightly rose 0.9 percent and 0.2 percent, respectively. For the year ended December 2016, purchases declined 1.7 percent to NZD 52.5 billion. Imports increased from Australia (4.3 percent), Japan (6.6 percent) and China (0.4 percent) but declined from the US (-5.7 percent) and the EU (-0.3 percent).


Wednesday January 25 2017
New Zealand Inflation Rate Highest Since 2014
Statistics New Zealand | Deborah Neves | deborah.neves@tradingeconomics.com

Consumer prices in New Zealand jumped 1.3 percent year-on-year in the fourth quarter of 2016, compared to an upwardly revised 0.4 percent rise in the previous period and above market expectations of 1.2 percent. It was the highest level since the third quarter of 2014 mainly due to higher prices of newly built houses, excluding land and rentals for housing.

Housing-related prices continued to be the main upward contributor, influenced by purchase of newly built houses, excluding land (up 6.5 percent, the largest increase since Q3 of 2005); with Auckland up 8.2 percent; rentals for housing (up 2.0 percent, the lowest since Q1 of 2014); with Auckland up 3.2 percent, and Canterbury down 0.8 percent; real estate services (up 12 percent); local authority rates (up 3.2 percent); electricity (up 2.3 percent) and property maintenance services (up 3.4 percent).

The annual increases for housing-related prices were partly offset by lower transport group prices, influenced by other private transport services (down 13 percent), caused by lower vehicle relicensing fees; international air transport (down 5.7 percent). In addition, fruit also declined (down 6.3 percent in the year to December 2016).

Tradables decreased 0.1 percent in the year to December 2016. Lower prices for international air fares, fruit, and package holidays made the main downward contributions. The NZ dollar remains at a historically high level against the trade weighted index.

Non-tradables increased 2.4 percent in the latest year. Prices for the purchase of new housing, excluding land, made the most significant upwards contribution, followed by cigarettes and tobacco, and housing rentals. The increases were partly offset by decreases for other private transport services.  

On a quarterly basis, consumer prices also rose 0.4 percent, from an upwardly revised 0.3 percent gain in the previous quarter. 




Wednesday December 21 2016
New Zealand GDP Growth Up To 1.1% In Q3
Statistics New Zealand | Joana Taborda | joana.taborda@tradingeconomics.com

The New Zealand economy advanced 1.1 percent on quarter in the third quarter of 2016, higher than a downwardly revised 0.7 percent expansion in the previous period and beating market expectations of 0.9 percent. It is the highest growth rate in three quarters. The expansion was broad-based, with thirteen of the sixteen industries rising, while the main weakness came from agriculture.

Business services increased 2.0 percent (0.4 percent in Q2), due to scientific, architectural and engineering services. Transport was up 3.7 percent (0.2 percent in Q2), due to increases in road, air, and transport support services. Manufacturing rose 1.2 percent (1.6 percent in Q2), due to food, beverage, and tobacco manufacturing; and transport equipment, machinery and equipment manufacturing. Construction expanded 2.1 percent (2.6 percent in Q2), due to increases in all of the construction sub-industries. In contrast, agriculture declined 0.1 percent (+1.4 percent in Q2), utilities shrank 0.2 percent (-0.4 percent in Q2) and informattion media and telecommunications decreased 1.1 percent (-0.5 percent in Q2).

Year-on-year, the economy expanded 3.5 percent, following a downwardly revised 3.4 percent growth in the pprevious period.


Tuesday December 20 2016
New Zealand Trade Gap Narrows in November
Statistics New Zealand | Joana Taborda | joana.taborda@tradingeconomics.com

New Zealand trade deficit decreased 11.3 percent year-on-year to NZD 705 million in November of 2016, as imports fell faster than exports. It compares with market expectations of a NZD 500 million gap. For the year ended November 2016, the annual trade deficit was NZD 3.2 billion.

Exports declined 5.4 percent year-on-year to NZD 3855 million. Meat and edible offal led the fall, down NZD 158 million (-31 percent). In contrast, milk powder, butter, and cheese rose NZD 31 million (2.6 percent); logs, wood, and wood articles went up NZD 34 million (12 percent) and fruit increased NZD 16 million (27 percent). Exports to the EU fell NZD 116 million (-32 percent), and to the USA by NZD111 million (-23 percent). Other top export destinations (China, Australia, and Japan) showed little change.
 
Imports declined 6.4 percent to NZD 4560 million: capital goods led the fall, down NZD 326 million (-26 percent); intermediate goods declined NZD 53 million (-2.9 percent) and consumption goods fell NZD 34 million (-2.6 percent). In contrast, crude oil was up NZD 52 million (29 percent) in value. Of top import partners, the USA fell NZD 351 million (-46 percent), led by aircraft and parts. Other top import destinations (China, Australia, and Japan) rose in value.