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. 




Wednesday May 09 2018
New Zealand Leaves 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 10 May 2018, as widely expected. The central bank last moved the key rate in November of 2016. Policymakers underscored that consumer price inflation remains below the 2 percent mid-point of the central bank target due, in part, to recent low food and import price inflation, and subdued wage pressures. They also mentioned that the direction of the next move is equally balanced, up or down. 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 some time to come. The direction of our next move is equally balanced, up or down. Only time and events will tell.

Economic growth and employment in New Zealand remain robust, near their sustainable levels. However, consumer price inflation remains below the 2 percent mid-point of our target due, in part, to recent low food and import price inflation, and subdued wage pressures.

The recent growth in demand has been delivered by an unprecedented increase in employment. The number of willing workers continues to rise, especially with more female and older workers choosing to participate. Likewise net immigration has added to the supply of labour, and the demand for goods, services, and accommodation.
Ahead, global economic growth is forecast to continue supporting demand for New Zealand’s products and services. Global inflation pressures are expected to rise but remain contained.
At home, ongoing spending and investment, by both households and government, is expected to support economic growth and employment demand. Business investment should also increase due to emerging capacity constraints.

The emerging capacity constraints are projected to see New Zealand’s consumer price inflation gradually rise to our 2 percent annual target.

To best ensure this outcome, we expect to keep the OCR at this expansionary level for a considerable period of time. This is the best contribution we can make, at this moment, to maximising sustainable employment and maintaining low and stable inflation.

Our economic projections, assumptions, and key risks and uncertainties, are elaborated on fully in our Monetary Policy Statement.




Wednesday May 02 2018
New Zealand Jobless Rate Falls to 9-Year Low in Q1
Statistics New Zealand | Mario | mario@tradingeconomics.com

New Zealand's unemployment rate edged down to 4.4 percent in the first quarter of 2018 from 4.5 percent in the previous period, matching market expectations.

This was the fifth consecutive quarter the unemployment rate has fallen and was the lowest rate since the last quarter of 2008, as the number of unemployed went down by 3,000 to 119 thousand and employment went up by 15 thousand to 2.618 million.

The labor force participation rate edged down 0.1 percentage points to 70.8 percent in the first quarter.

The underutilisation rate fell to 11.9 percent from 12.2 percent, reflecting about 340 thousand New Zealanders with potential to work more.

Annual wage inflation, as measured by the labor cost index, stood at 1.8 percent in the first quarter, unchanged from the previous period. Private sector wages rose by 1.9 percent (vs 1.9 percent in the previous quarter) and the growth of public sector wages was recorded at 1.5 percent (vs 1.5 percent). On a quarterly basis, wages increased by 0.3 percent, down from a 0.4 percent climb in the previous quarter.




Thursday April 26 2018
New Zealand Trade Balance Swings to Deficit
Mario | mario@tradingeconomics.com

New Zealand posted a NZD 86 million trade deficit in March 2018, compared with a NZD 262 million surplus in the same month of the previous year and market expectations of a NZD 270 million surplus. 

Exports rose 5.8 percent from the previous year to NZD 4.854 billion in March, compared to a 10.4 percent climb in the previous month. It was the slowest growth since February of 2017, mainly affected by: meat and edible offal (+2.1 percent vs +13.0 percent) and logs, wood, and wood articles (+17.9 percent vs +19.0 percent). Exports were mainly nudged by electrical machinery & equipment (+28.8 percent) and aluminum & aluminum parts (+22.5 percent).

Among major export partners, sales rose to: Korea (18.2 percent), Singapore (16.2 percent), Australia (11.2 percent), the United States (5.8 percent), and the European Union (4.9 percent). In contrast, exports dropped to China (4.3 percent) and Japan (3.9 percent).

Imports jumped 14.1 percent to NZD 4.940 billion, compared to a 5.0 percent climb in the previous month. The jump was mainly explained by an 88.0 percent surge in petroleum & products (vs -7.8 percent in February). Also, vehicles, parts & accessories grew by 7.4 percent after plunging 33.0 percent in the previous month.

Among top import partners, purchases rose from Korea (41.6 percent), the United States (30.0 percent), the European Union (19.4 percent), and Thailand (10.3 percent). In contrast, purchases from Japan declined 8.8 percent. 


Thursday April 19 2018
New Zealand Inflation Slows Further in Q1
Mario | mario@tradingeconomics.com

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.

Lower inflation was mainly explained by softer price increases in the groups of food (0.6 percent vs 2.3 percent in the previous period), health (0.9 percent vs 1.0 percent), transport (0.5 percent vs 1.5 percent). Also, prices in the education group fell 5.1 percent after climbing 2.4 percent in the previous quarter.

In contrast, prices advanced at a faster pace for housing & household utilities (3.1 percent vs 3.0 percent) and alcoholic beverages & tobacco (4.5 percent vs 4.2 percent), explained by the annual tobacco tax increase on 1 January 2018, with prices up 11 percent. Meantime, prices for recreation and culture rebounded modestly (0.1 percent) after declining 1.1 percent in the previous period.

On a quarterly basis, consumer prices rose 0.5 percent in the first quarter of 2018, up from a 0.1 percent increase recorded in the previous period and also matching market expectations.





Sunday March 25 2018
New Zealand Trade Balance Swings to Surplus in February
Statistics New Zealand | Joana Ferreira | joana.ferreira@tradingeconomics.com

New Zealand posted a NZD 217 million trade surplus in February 2018, compared with a NZD 42 million deficit in the same month of the previous year and market expectations of a NZD 100 million gap.

Exports rose 11 percent from the previous year to NZD 4.460 billion in February, boosted by higher sales of: meat and edible offal (13 percent), mainly sheep meat (21 percent); logs, wood, and wood articles (19 percent), mainly untreated logs (22 percent); milk powder, butter, and cheese (5.3 percent), mainly butter (28 percent); and fish, crustaceans, and molluscs (31 percent).

Among major export partners, sales rose to: China (12 percent), led by rises in sheep meat and logs, wood, and wood articles; Australia (5.3 percent) and the US (5.1 percent), with increases across a range of commodities; the EU (12 percent), led by a rise in meat and edible offal; and Japan (23 percent), led by a rise in logs, wood, and wood articles.

Imports increased 4.6 percent to NZD 4.244 billion, a new high for total imports in a February month. Mechanical machinery and equipment led imports rise (10 percent), followed by food residues, wastes, and fodder (70.3 percent), mainly palm oil cake (109 percent), and electrical machinery and equipment (13 percent). By contrast, imports of crude oil dropped 7.8 percent and those of vehicles parts and accessories fell 18 percent, led by a fall in motor vehicles (-33 percent).

Among top import partners, purchases rose from: China (15 percent), with rises across a range of commodities, such as fertilisers, and electrical machinery and equipment; the EU (11 percent), led by a rise in mechanical machinery and equipment; Australia (0.8 percent); and the US (2.6 percent), led by a rise in mechanical machinery and equipment. On the other hand, imports from Japan declined 50 percent, due to a fall in vehicles, parts, and accessories (-65 percent), such as motor vehicles (-67 percent) and trucks and vans (-73 percent).

"The delay in final unloading of four vehicle carriers at New Zealand ports had an impact on the total value of vehicle imports in February," international statistics manager Tehseen Islam said. "The discovery of stink bugs on these vessels meant that around 8,000 cars could not enter New Zealand as scheduled".



Wednesday March 21 2018
New Zealand Leaves 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 21 March 2018, as widely expected. The central bank last moved the key rate in November of 2016. Policymakers underscored that global economic growth continued to gradually improve, albeit weaker than expected GDP growth in the fourth quarter, mainly due to weather effects on agricultural production. In addition, although recognizing that inflation remains subdued, the policy statement now highlighted some signs of emerging pressures, namely: an increase in commodity and agricultural prices.

The central bank also stated that monetary policy will remain accommodative for a considerable period, as numerous uncertainties remain and policy may need to adjust accordingly. Consumer prices rose 1.6 percent year-on-year in Q4, below expectations of 1.9 percent and 1.9 percent in the previous period. It was the lowest quarterly inflation in a year.

Statement by Reserve Bank Governor Grant Spencer:

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

The outlook for global growth continues to gradually improve. While global inflation remains subdued, there are some signs of emerging pressures. Commodity prices have continued to increase and agricultural prices are picking up. Equity markets have been strong, although volatility has increased. Monetary policy remains easy in the advanced economies but is gradually becoming less stimulatory.

GDP was weaker than expected in the fourth quarter, mainly due to weather effects on agricultural production. Growth is expected to strengthen, supported by accommodative monetary policy, a high terms of trade, government spending and population growth. Labour market conditions are projected to tighten further.

Residential construction continues to be hindered by capacity constraints. The Kiwibuild programme is expected to contribute to residential investment growth from 2019. House price inflation remains moderate with restrained credit growth and weak house sales.

CPI inflation is expected to weaken further in the near term due to softness in food and energy prices and adjustments to government charges. Tradables inflation is projected to remain subdued through the forecast period. Non-tradables inflation is moderate but is expected to increase in line with a rise in capacity pressure. Over the medium term, CPI inflation is forecast to trend upwards towards the midpoint of the target range. Longer-term inflation expectations are well anchored at 2 percent.

Monetary policy will remain accommodative for a considerable period. Numerous uncertainties remain and policy may need to adjust accordingly.




Wednesday March 14 2018
New Zealand GDP Grows 0.6% in Q4
Mario | mario@tradingeconomics.com

The New Zealand economy advanced 0.6 percent on quarter in the fourth quarter of 2017, matching the expansion in the previous period but slightly below the 0.7 percent growth expected by consensus.

Manufacturing output edged down 0.1 percent after expanding 0.7 percent in Q3. Meantime, construction lost steam in Q4 (0.7 percent vs 3.5 percent) and primary industries plunged 2.4 percent after remaining unchanged in the previous quarter, with agriculture contracting 3.2 percent (vs -0.4 percent in Q3).

In contrast, utilities rebounded 1.5 percent after plunging 1.9 percent, whereas services grew further (1.1 percent vs 0.6 percent in Q3) nudged by wholesale trade (2.2 percent vs 0.7 percent) and retail trade & accommodation (1.6 percent vs 0.0 percent).

Year-on-year, GDP expanded 2.9 percent, also below consensus expectations of 3.1 percent growth and the slowest growth rate since September of 2014.


Monday February 26 2018
New Zealand January Trade Deficit Widest Since 2007
Mario | mario@tradingeconomics.com

New Zealand’s trade deficit widened to NZD 566 million in January of 2018 compared to a NZD 227 million gap in the same month of the previous year and expectations of a NZD 2710 million gap. It was the largest deficit for a January month since 2007, with both exports (+9.5 percent year-on-year vs +24.3 percent in December) and imports (+17.1 percent vs +10.8 percent) reaching new highs for January months.

Exports reached 4,309 NZD million in January of 2018, climbing only 9.5 percent year-on-year after a downwardly revised 24.3 percent increase in December. Milk powder, butter & cheese exports lost steam in January, jumping 8.0 percent after a 30.3 percent advance in the previous month. Meat & edible offal also increased at a slower rate of 16.9 percent, compared to 46.6 percent in December. In addition, fruit exports declined 12.2 percent. By destination, exports to Korea grew a strong 38.2 percent, while those to Japan expanded by 29.8 percent and to the EU by 22.2 percent. In contrast, exports to China fell 2.1 percent and to the US 1.5 percent. 

Meantime, imports increased by a faster rate of 17.1 percent year-on-year to 4,875 NZD million in January of 2018, compared to a downwardly revised 10.8 percent climb in the previous month. Purchases of aircraft & parts rebounded sharply (+49.3 percent) after a 32.5 percent plunge in December. In addition, vehicles, part & accessories also rebounded (6.8 percent) after a modest decline of 3.9 percent. By country of origin, imports from the EU rose 27.3 percent percent after climbing 18.6 percent in the previous month. Imports from Korea soared 138.5 percent, while those from Malaysia surged 149.3 percent. Imports from China (+13.4 percent), Australia (+13.4 percent), and the US (+11.3 percent) continued to expand. In contrast, those from Japan declined 8.2 percent in January.