Thursday September 20 2018
New Zealand GDP Growth Jumps to 1.0% QoQ
Statistics New Zealand | Mario | mario@tradingeconomics.com

The New Zealand economy advanced 1.0 percent on quarter in the second quarter of 2018, above 0.5 percent in the previous quarter and market expectations of 0.7 percent. It was the largest quarterly rise in two years, as 15 of the 16 industries expanded.

Agriculture jumped to a 4.1 percent growth rate (vs 1.0 percent in Q1), the strongest quarterly growth since Q3 2014 and mainly boosted by dairy production and forestry. Also, construction (+0.6 percent vs -0.9 percent) and utilities (+3.7 percent vs -0.6 percent) rebounded. Growth in electricity generation was the largest in nine years, with wet and cold weather likely to have influenced both production and demand. In addition, services gained steam (1.0 percent vs 0.6 percent), mainly nudged by wholesale trade (+1.7 percent vs +0.3 percent), retail trade & accommodation (+1.5 percent vs +0.3 percent), transport (+1.8 percent vs +0.6 percent), real estate services (+0.9 percent vs +0.4 percent), recreations & arts services (+3.5 percent vs +0.8 percent), and health services (+0.7 percent vs +0.4 percent). 

In contrast, mining plummeted 19.9 percent (-1.4 percent), the largest fall in 29 years after an unplanned shutdown stalled gas production. Also, manufacturing moderated its growth pace to 0.4 percent (vs 0.6 percent), further affected by lower petroleum and chemical product manufacturing following a planned shutdown at Marsden Point refinery.

Year-on-year, GDP expanded 2.8 percent year-on-year in the second quarter of 2018, slightly up from a downwardly revised 2.6 percent growth in the previous period and above market expectations of 2.5 percent. 




Friday August 24 2018
New Zealand Trade Balance Swings to Deficit
Statistics New Zealand | Mario | mario@tradingeconomics.com

New Zealand posted a NZD 143 million trade deficit in July 2018, compared with a NZD 92 million surplus in the same month of the previous year and with market expectations of a NZD 400 million deficit. Exports surged 15.8 percent from the previous year to NZD 5350 million and imports soared 21.3 percent to NZD 5492 million.

Imports soared 21.3 percent year-on-year to NZD 5490 million compared to an upwardly revised 16.2 percent jump in the previous month and the largest since November last year. Purchases rose boosted by oil & products (+83.9 percent); mechanical machinery & equipment (+16.7 percent) and vehicles, parts & accessories (+4.4 percent). In contrast, aircrafts & parts declined 8.5 percent. Among top imports partners, purchases surged from China (+27.7 percent), the EU (+15 percent), Australia (+6.7 percent), the US (+12 percent) and Japan (+17 percent). Notably, imports from the United Arab Emirates surged 621.5 percent to NZD 322 million (vs NZD 45 million).

Meantime, exports jumped 15.8 percent from the previous year to NZD 5350 million compared to a downwardly revised 4.0 percent climb in the previous month. Sales increased driven by milk powder, butter & chesse (+21.3 percent); meat and edible offal (+22.0 percent) and logs, wood & wood articles (+30.5 percent). Among major exports partners, sales gained steam to China (+27.6 percent), the US (+4.1 percent) and the EU (+3.5 percent). Notably, exports to Singapore soared 150.4 percent. In contrast, exports to Australia declined 2.8 percent.





Wednesday August 08 2018
New Zealand Leaves Interest Rate Unchanged at 1.75%
Mario | mario@tradingeconomics.com

The Reserve Bank of New Zealand left its official cash rate unchanged at record low of 1.75 percent on August 8th, saying economic growth has moderated while inflation is likely to increase in the near term due to higher fuel prices and a lower exchange rate. Also, policymakers underscored that rates will remain at this level through 2019 and into 2020. The central bank last moved the key rate in November of 2016.

Statement by Reserve Bank Governor Adrian Orr:

The Official Cash Rate (OCR) remains at 1.75 percent. We expect to keep the OCR at this level through 2019 and into 2020, longer than we projected in our May Statement. The direction of our next OCR move could be up or down.

While recent economic growth has moderated, we expect it to pick up pace over the rest of this year and be maintained through 2019.

Robust global growth and a lower New Zealand dollar exchange rate will support export earnings. At home, capacity and labour constraints promote business investment, supported by low interest rates. Government spending and investment is also set to rise, while residential construction and household spending remain solid.

The labour market has tightened over the past year and employment is roughly around its maximum sustainable level. We expect the unemployment rate to decline modestly from its current level.

There are welcome early signs of core inflation rising. Inflation will increase towards 2 percent over the projection period as capacity pressures bite. This path may be bumpy however, with one-off price changes from global oil prices, a lower exchange rate, and announced petrol excise tax rises expected. We will look through this volatility as appropriate, and only respond to any persistent movements in inflation.

Risks remain to our central forecast. The recent moderation in growth could last longer. Low business confidence can affect employment and investment decisions. Conversely, there is a chance that inflation could increase faster if cost pressures can pass through into higher prices and impact inflation expectations.

We will keep the OCR at an expansionary level for a considerable period to contribute to maximising sustainable employment, and maintaining low and stable inflation.





Wednesday August 01 2018
New Zealand Jobless Rate Edges Up in Q2
Statistics New Zealand | Gabriela Costa | gabriela.costa@tradingeconomics.com

New Zealand's unemployment rate went up to 4.5 percent in the second quarter of 2018 from 4.4 percent in the previous period, surpassing market expectations of 4.4 percent. The slight rise in the jobless rate follows five consecutive falls. Still, it remains close to the nine-year low of 4.4 percent seen in the previous quarter.

The number of unemployed persons increased by 4 thousand to 124 thousand and employment rose by 13 thousand to 2631 thousand. The labor force participation rate edged up by 10 bps to 70.9 percent in the second quarter.

The underutilization rate went up to 12 percent from 11.9 percent, reflecting about 344 thousand New Zealanders with potential to work more.

Annual wage inflation, as measured by the labor cost index, increased 1.9 percent in Q2, following a 1.8 percent gain in the previous period. The minimum wage increase by the Government of 75 cents to $16.50 on 1 April 2018 was the main contributor to higher wage rates for the quarter. Private sector wages rose by 2.1 percent (vs 1.9 percent in the previous quarter) and the growth of public sector wages was recorded at 1.3 percent (vs 1.5 percent). On a quarterly basis, wages increased by 0.5 percent, up from a 0.3 percent climb in the previous quarter.




Tuesday July 24 2018
New Zealand Trade Balance Unexpectedly Swings to Deficit
Mario | mario@tradingeconomics.com

New Zealand posted a NZD 113 million trade deficit in June 2018, compared with a NZD 243 million surplus in the same month of the previous year and market expectations of a NZD 200 million surplus. Exports rose 4.6 percent from the previous year to NZD 4909 billion and imports jumped 12.9 percent to NZD 5022 billion.

Exports rose 4.6 percent from the previous year to NZD 4909 billion in June of 2018 compared to a downwardly revised 9.1 percent climb in the previous month. It was the second slowest growth rate in the last 16 months. Slower growth against May was mainly explained by meat and edible offal (+9.3 percent vs +17.2 percent) and logs, wood & wood articles (+9.5 percent vs +26.1 percent). Among major exports partners, sales lost steam to China (+6.2 percent vs +27.3 percent), the European Union (+6.8 percent vs +16.7 percent), Australia (+3.8 percent vs +12.3 percent). In contrast, exports to the United States rebounded 9.5 percent after a 0.6 percent dip in May.

Imports climbed 12.9 percent year-on-year to NZD 5022 billion in June of 2018, compared to an upwardly revised 6.3 percent jump in the previous month. Faster growth was mainly explained by a sharp rebound in oil & products (+64.4 percent vs -30.1 percent in May). Meantime, aircrafts and parts gained steam (+127.9 percent vs +40.0 percent). In contrast, vehicles, parts & accessories declined 1.7 percent (vs +25.1 percent). Among top import partners, purchases from China climbed further (+11.4 percent vs +11.0), whereas those to Japan cooled down (+16.8 percent vs +18.8 percent). 


Tuesday July 17 2018
New Zealand Inflation Rate Climbs in Q2
Mario | mario@tradingeconomics.com

Consumer prices in New Zealand increased 1.5 percent year-on-year in the second quarter of 2018 following a 1.1 percent increase in the previous quarter. The print came slightly below consensus (1.6 percent) and was the second slowest inflation rate in the last six quarters.

Higher inflation was mainly explained by prices of food (0.7 percent compared to 0.6 percent); transport (2 percent compared to 0.5 percent); miscellaneous goods and services (3.1 percent compared to 2.5 percent); and alcoholic beverages and tobacco (5.6 percent compared to 4.5 percent). Meantime, prices for housing and household utilities remained increasing at a 3.1 percent pace.

In contrast, prices for household contents and services declined for the fourth straight quarter (-0.1 percent vs -1.0 percent in Q1) while clothing & footwear costs (-0.7 percent vs -1.4 percent) were down for the third consecutive period. In addition, prices for communication declined at a faster pace of 4.9 percent compared to 4.7 percent in the previous quarter, while education costs decreased 5.2 percent (vs -5.1 percent). 

On a quarterly basis, consumer prices rose 0.4 percent in the second quarter of 2018, slightly down from a 0.5 percent increase recorded in the previous period and also below market expectations of 0.5 percent. 




Wednesday June 27 2018
New Zealand Leaves Interest Rate Unchanged 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 27 June 2018, as widely expected. The central bank last moved the key rate in November of 2016. Policymakers underscored that the outlook for the economy remains intact and that CPI inflation is likely to increase in the near term due to higher fuel prices. Consumer prices in New Zealand increased 1.1 percent year-on-year in the first three months of 2018 following a 1.6 percent increase in the previous quarter, matching market expectations. It was the slowest inflation since the third quarter of 2016.

Statement by Reserve Bank Governor Adrian Orr:

The Official Cash Rate (OCR) will remain at 1.75 percent for now. However, we are well positioned to manage change in either direction – up or down – as necessary.

Our outlook for the New Zealand economy, as detailed in the May Monetary Policy Statement, remains intact. Employment is around its sustainable level and consumer price inflation remains below the 2 percent mid-point of our target, necessitating continued supportive monetary policy for some time to come.

Global economic growth is expected to support demand for our products and services. Global inflationary pressure is also expected to be higher but remain modest. This outlook has been tempered slightly by trade tensions in some major economies. Ongoing volatility in some emerging market economies continues.

Domestically, ongoing spending and investment, by both households and government, is expected to support growth. However, the recent weaker GDP outturn implies marginally more spare capacity in the economy than we anticipated. The Government’s projected spending impulse is also slightly lower and later than anticipated.

CPI inflation is likely to increase in the near term due to higher fuel prices. Beyond that, inflation is expected to gradually rise to our 2 percent annual target, resulting from capacity pressures.
The best contribution we can make to maximising sustainable employment, and maintaining low and stable inflation, is to ensure the OCR is at an expansionary level for a considerable period.



Tuesday June 26 2018
New Zealand Trade Surplus Widens in May
Mario | mario@tradingeconomics.com

New Zealand posted a NZD 294 million trade surplus in May 2018, compared with a NZD 62 million surplus in the same month of the previous year and market expectations of a NZD 100 million surplus. Exports rose 10.4 percent from the previous year to NZD 5415 billion and imports jumped 5.7 percent to NZD 5121 billion.

Exports rose 10.4 percent from the previous year to NZD 5415 billion in May of 2018 compared to a downwardly revised 5.3 percent climb in the previous month. It was the second highest growth rate in five months. Faster growth against April was mainly explained by meat and edible offal (+17.2 percent vs +15.0 percent) and logs, wood & wood articles lost steam (+26.1 percent vs +2.2 percent). Among major export partners, sales in China rose further (+27.3 vs +21.5 percent). In contrast, exports to the European Union lost steam (+16.7 percent vs +24.7 percent). Meantime, sales to Australia rebounded (+12.3 percent vs -4.0 percent), while exports to the United States declined 0.6 percent after a 2.2 percent slip.

Imports climbed 5.7 percent year-on-year to NZD 5121 billion in May of 2018, compared to a downwardly revised 14.5 percent jump in the previous month. Slower growth was mainly explained by aircrafts and parts (+40.0 percent vs +113.6 percent in April) and a plunge in oil & products (-30.1 percent vs +55.6 percent). In contrast, the growth clip of vehicles, parts & accessories edged up (+25.1 percent vs +24.5 percent). Among top import partners, purchases rose at a slower rate from Japan (+18.8 percent vs +47.0 percent). In contrast, imports from China rebounded 11.0 percent after edging down 0.3 percent.


Wednesday June 20 2018
New Zealand GDP Growth Eases to 0.5% QoQ
Mario | mario@tradingeconomics.com

The New Zealand economy advanced 0.5 percent on quarter in the first quarter of 2018, below the 0.6 percent for the previous quarter and matching market expectations.

Slower growth was explained by contractions in mining (-0.2 percent vs +1.4 percent in the previous quarter), utilities (-0.4 percent vs +0.7 percent) and construction (-1.0 percent vs +0.8 percent). In addition, growth for services slowed down (+0.6 percent vs +1.1 percent), mainly explained by wholesale trade (+0.2 percent vs +2.3 percent), retail trade & accommodation (+0.3 percent vs 1.6 percent), transport (0.5 percent vs 1.6 percent), and financial & insurance services (0.1 percent vs 1.0 percent).

In contrast, manufacturing activity rebounded 0.7 percent after edging down 0.1 percent in the fourth quarter, while primary activity rebounded 0.6 percent after a 2.6 contraction in Q4.

Year-on-year, GDP expanded 2.7 percent, also below the 2.9 percent for the previous quarter and in line with expectations.  


Thursday May 24 2018
New Zealand Trade Surplus Beats Expectations
Mario | mario@tradingeconomics.com

New Zealand posted a NZD 263 million trade surplus in April 2018, compared with a NZD 547 million surplus in the same month of the previous year and market expectations of a NZD 200 million surplus.

Exports rose 7.3 percent from the previous year to NZD 5054 billion, compared to a 4.5 percent climb in the previous month. Faster growth against March was mainly explained by meat and edible offal (+15.0 percent vs +2.1 percent). Sales of fruit jumped 50.6 percent, with kiwi sales jumping 9 percent. In contrast, logs, wood, and wood articles lost steam (+2.2 percent vs 17.9 percent). Among major export partners, sales in China rebounded sharply after contracting in the previous month (+21.5 vs -4.3 percent). Exports to the European Union gained steam (+24.7 percent vs +4.9 percent). Sales to Australia and the United States declined 4.0 percent (vs +11.2 percent) and 2.2 percent (vs +5.8 percent) respectively.

Imports jumped 15.1 percent year-on-year to NZD 4791 billion in April of 2018, compared to an upwardly revised 14.4 percent climb in the previous month. The jump was mainly explained by a 113.6 percent surge in aircraft and parts and faster growth in vehicles, parts & accessories (24.5 percent vs 7.4 percent). In contrast, sales of oil & products lost steam (+55.6 percent vs +88.0 percent). Among top import partners, purchases rose sharply from Japan (+47.0 percent vs -8.8 percent). In contrast, imports from China edged down 0.3 percent.