Vital Statistics
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GDP
(average growth for year to Sep 09)
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-2.2%
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CPI
(Sep 09 incr on Sep 08) |
1.7%
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Current account balance
(year to Sep 09, % of GDP) |
-3.1%
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Unemployment
(Sep 09) |
6.5%
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Employment
(Sep 09 change on Sep 08) |
-1.8%
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New Zealand Economy
23 Nov 2009
On the September 2009 quarter, the producers’ price Index (PPI) outputs index fell 1.4 percent, while the PPI inputs index fell 1.1 percent.
On the September 2009 year, output prices have fallen by 2.1 percent, while input prices have fallen 5.8 percent.
This easing in producers’ prices began a year ago, after two and a half years of rapid growth. The fall in output prices have »»
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19 Nov 2009
The capital goods price index (CGPI) fell by 0.4 percent in the September 2009 quarter, which took the annual change to a 2.3 percent increase. This is the second consecutive quarter of easing in annual prices, following rapid increases over 2008. It is also the first quarterly fall in prices since the March 2003 quarter.
On the September 2009 quarter, four of the six asset »»
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12 Nov 2009
And on a positive note for families struggling with the food bill come the food price index data!!
Food prices are down for the third consecutive month, this time by a whopping 1.5 percent on September. Over the last three months food prices have fallen by 3.1 percent. However, even with this fall, food prices are still 2.0 percent higher than they were a year ago.
Looking closely »»
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06 Nov 2009
The increase in labour costs continues to slow in the September 2009 quarter, with salary and wage rates (including overtime) going up by 0.5 percent on the quarter and 2.1 percent on the year. The annual increase is the lowest recorded since the December 2002 quarter and it is the fourth consecutive quarter of easing increases in annual labour costs.
The major reason for the increases this quarter have been collective employment agreements, »»
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15 Oct 2009
The CPI rose 1.7 percent in the year to September 2009 quarter, down from the 1.9 percent and the 3.0 percent in the two previous quarter years. This was the lowest annual increase since the year to the March 2004 quarter.
This record low annual increase masks the fact that, on the quarter, prices rose 1.3 percent following smaller increases of 0.6 percent and 0.3 percent in the two »»
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02 Oct 2009
The “good” news is that the current account deficit is down sharply, and that our net international debtor position is slightly less cringe-worthy than in March. But the main reasons for this are the stronger exchange rate, poor demand for imported intermediate goods, and an Aussie bank having to pay its taxes.
The current account deficit narrowed drastically in the June 2009 »»
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30 Sep 2009
With global stock markets recovering lost ground, New Zealand house prices and house sales numbers turning up, the prospect of stable interest rates for another six months or so, rising net migration, and Australia, Germany and France recording positive GDP growth, many are suggesting the recession is past. From a technical sense, these suggestions are correct in that quarterly growth in New »»
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29 Sep 2009
I was called “a misery guts” last week, as I refused to participate in the party celebrating the end of the recession. Here are a few reasons why our celebrations should be somewhat muted, at best.
1. The much touted 0.1 percent represents a $27 million increase between the March and June quarters in seasonally-adjusted GDP measured in 1995/96 prices. This $27 million is made up »»
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14 Sep 2009
The price of food fell by 0.9% in August bringing annual prices down to 4.6 percent. Excluding the blips in June and July (which you could put down to inclement weather), you can see a downward trend in annual food prices that started in about September 2009.
Three of the five subgroups were down on the month, with grocery food prices down by 1.3%, fruit and vegetable prices down 3.3%, and »»
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09 Sep 2009
Latest Producers Price Index for June quarter 2009 were released by Statistics New Zealand on 19 August 2009.
Looking at producers prices, input prices are down, while output prices are up. Although output prices were down 0.7 percent on the June quarter they were up 2.1 percent on the year. Input prices did not change on the quarter but were down 1.2 percent on the year. Looking forward, both »»
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08 Sep 2009
The price of food eased this month. Although they were up 0.6 percent on the month and 8.4 percent on the year, this was down on the 2.8 percent increase in the June 2009 month and equal to the 8.4 percent on the year to June 2009.
All subgroups were up on the month apart from the meat, poultry and fish subgroup, which was down by 0.7 percent. Leading the increase was fruit and vegetables. »»
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05 Aug 2009
Net inward migration in the year ending June 2009 was 12,565 people. This is a 9,000 net increase since our last trough at 3,500 net inflow for the year to November 2008.
The net increase has been growing strongly since January-February this year and the seasonality pattern indicates that it will continue growing for at least the next five or six months. We expect the net inflow to be about »»
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04 Aug 2009
Salary and wage rates rose by 0.3 percent in the June quarter, taking them up 2.8 percent in the year to the June quarter. This is down from the 3.3 percent increase in the year to the March quarter. This is the lowest annual increase recorded since a 2.6 percent rise in the year to June 2005 quarter; and the 0.3 percent increase on the quarter is the lowest recorded since the September 2000 quarter.
Salary and wage rates in »»
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30 Jul 2009
The statement accompanying today’s OCR announcement was extremely disappointing. But not surprising.
Yes, there is the very welcome acknowledgement that:
“The level of the dollar in particular, is not helping the sustainability of the future growth, and brings with it additional economic risks."
“The forecast recovery is based on a further easing in financial »»
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23 Jul 2009
Markets are still digesting the decision by the Reserve Bank of New Zealand (RBNZ) to leave the Official Cash Rate (OCR) at 2.5 percent. The first reaction was one of pleasant surprise to a market which had expected a cut and, as such, the Trade-Weighted Index (TWI) rose by 60 points to 60.1 and the 90-day Bank Bills rate rose 10 points to 2.82 percent. As we go to press the NZ$ is stronger at »»
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17 Jul 2009
The CPI came out higher than most forecasts at 1.9 percent for the year. This was around 20 to 30 percentage points higher than expected and has resulted in many predicting the RB’s easing of monetary conditions is over and tightening could be sooner than expected. But let’s get a grip and consider why the prices were higher than expected rather than jumping on the inflation »»
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17 Jul 2009
Food prices were up 2.8 percent in the June 2009 month, the largest monthly increase since GST was introduced in 1989. This meant food prices are 8.4 percent higher than a year earlier.
Fruit and vegetable prices were up 15 percent on the month with lettuce more than twice last month’s price and tomato prices up by two-thirds. However, all other subgroups increased as well. »»
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14 Jul 2009
Real GDP growth has now been negative for the fourth quarter running, with a fall in economic activity of 0.9% recorded in the December 2008 quarter.
Similar to last quarter, the fall in production-side GDP was led by the goods-producing industries. The goods producing industries were down 3.6%, driven mainly by a fall in manufacturing activity of 3.8%. Declines within the manufacturing »»
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13 Jul 2009
There continue to be no massive shocks hitting the New Zealand labour market. The actual state of the labour market and the economy has been obscured by many commentators’ obsession with the unemployment indicator, rather than employment indicators.
There has been a steady decline in employment growth since 2005, and there are now some signs that this decline is bottoming out.
Total »»
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07 Jul 2009
Budget 2009 involves borrowing on a scale not seen since the 1980s. The government’s Debt Management Office (NZDMO) will issue more than $8.5bn in bonds during 2009/10 and a net $36.9bn out to 2013.
But this borrowing is seen as acceptable, even by the credit rating agencies, given its focus on enhancing the productive side of the economy by improving infrastructure.
Speaking with »»
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29 Jun 2009
I noted before the Budget announcements that we needed a statement attuned to the needs of the New Zealand economy, and not those of the credit rating agencies. And, as I always told ECON101 students in their first class, economics is about people not about money. So, what did we get from the Budget about people, about money, about the NZ economy, and about the credit rating agencies?
What we got was debt. 34 times. We did get exports six »»
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25 Jun 2009
Much has been heard recently regarding the ‘green shots’ of recovery. We remain unconvinced and continue to believe the global economy will take some time to return to anything near normal.
However, indicators of forward orders, employment and, yes, confidence, suggest the bottom of New Zealand’s recession may well have been reached. But the post-recession forecast is, at best, »»
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18 Jun 2009
Food prices increased 0.3 percent in May meaning that over the year to May prices have increased by 6.8 percent. Grocery food prices increased by 1.0 percent in May and are up 7.2 percent on the year.
As we can see from the graph, food prices have eased back quite a bit over the last 9 months averaging 0.2 percent per month.
Downward pressure came from only one subgroup, fruit and vegetables, »»
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09 Jun 2009
Producers prices fell in the quarter to March 2009 resulting in an easing on the year. However, the capital goods price index was up on the quarter and the year due to the depreciation in the New Zealand exchange rate in the March 2009 quarter.
PPI
As noted in the graph, producers prices are easing back, with large falls in the March 2009 quarter. Driving these falls were dairy »»
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01 Jun 2009
Budget 2009 involves borrowing on a scale not seen since the 1980s. The government’s Debt Management Office (NZDMO) will issue more than $8.5 billion in bonds during 2009/10 and a net $36.9 billion out to 2013.
But this borrowing is seen as acceptable, even by the credit rating agencies, given its focus on enhancing the productive side of the economy by improving its infrastructure.
Speaking with officials from the NZDMO, the bond issues »»
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29 May 2009
The Government set out ‘The Road to Recovery’ in its 2009 Budget. The Budget’s three main objectives were:
helping New Zealanders through the recession and supporting jobs
lifting productivity and raising New Zealand’s international competitiveness
taking steps to keep government debt under control.
Budget 2009 had to do more than walk a »»
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29 May 2009
I noted last week that we needed a Budget that addressed the needs of the New Zealand economy, and not those of the credit rating agencies. And, as I always told ECON101 students in their first class, economics is about people not about money. So, what did we get from the Budget about people, about money, about the NZ economy, and about the credit rating agencies?
What we got was debt. 34 times. »»
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28 May 2009
In its just-released six-monthly Financial Stability Report, the Reserve Bank (RB) provides a comprehensive review of the New Zealand financial system and the problems besetting it from the global credit crisis. The picture emerging from the analysis confirms BERL’s concerns that the currently tight credit situation is unlikely to improve in the near future. In particular, it is likely »»
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25 May 2009
The actual state of the labour market and the economy has been obscured by many commentators’ obsession with the U-word – unemployment.
When the Household Labour Force Survey (HLFS) for the March 2009 quarter was published, many commentators trumpeted the increase in unemployment to 5 percent of the labour force. Some went so far as to opine that it was not as high as expected, and »»
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12 May 2009
Food prices dropped in the month of April 2009 by 0.6 percent following rises in the previous three months. On the year, prices are still up by 7.6 percent. Not wanting to sound like a broken record, annual prices are unlikely to turn negative until at least September 09, when the dreaded 2.8 percent monthly increase of August 2008 falls out of the calculations.
Prices were down on »»
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11 May 2009
The labour cost index suggests that the recession is not having an impact on curtailing pay increases, with the LCI up 3.3 percent on the previous year; up 0.6 percent on the previous quarter.
On the quarter, the increases were the same for both the public and private sectors (0.6 percent), while on the year, public sector salaries were up 4.3 percent vs. 3.0 percent for the private sector.
A key factor behind the increases was collective »»
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28 Apr 2009
The net inflow of long-term migrants is on the increase again. In the 12 months to February 2009 the net inflow was 6,160, a welcome increase from the trough in the latest cycle of 3,570 in the 12 months to November 2008.
The interesting aspect of this turnaround is that it has been quite rapid – a little like the 2001-02 increase. Also like 2001-02 it is being driven mostly by reduction »»
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24 Apr 2009
Now that New Zealand is being battered by turbulence from the global financial crisis, the new government has set itself the task of developing a “more focused, efficient, and productive public service”. This is being sold as a rebalancing of resources away from bureaucracy and towards ‘front-line’ services. It is also committing itself to a substantial increase in »»
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22 Apr 2009
This piece is not rocket science. All it does is to quantify what anyone with a bit of economic sense already knows. New Zealand exports are driven by two things, or if we’re nit-picky (as the author is in this piece), three.
World prices and world trade volumes (which you could lump together as world trade value)
The relative strength of the NZ$.
How have our »»
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20 Apr 2009
Consumer prices were up 0.3 percent in the March 2009 quarter, with annual CPI falling slightly to 3.0 percent.
On the quarter, prices fell in the transport, communication, recreation and culture and clothing and footwear subgroups. International air travel was down 16.5 percent, diesel was down 19.2 percent and petrol was down 1.0 percent on the quarter.
Pushing prices up this quarter was »»
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17 Apr 2009
Food prices were up 0.5 percent in the March 2009 month, an 8.6 percent increase on the year to March.
As we noted in our last comment on food prices, it is important to note that annual increases will appear high because of the spike in the May to August 08 period, where prices increased by 5.6 percent in a four month period. This can be clearly seen on the graph below. The spike was caused »»
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15 Apr 2009
[This article was written before the December 2008 quarter release, where GDP fell another 0.9 percent]
The headline figure for the September 2008 quarter confirmed a third consecutive quarter of lower economic activity.
On the production side, the 0.4 percent fall in GDP over the September quarter was led by a 5 percent fall in the non-agriculture primary sectors. A further decline was »»
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09 Apr 2009
The RBNZ’s 50 points reduction in its Official Cash Rate (OCR) to 3.0% this month was at the lower end of expectations and in line with indications in its Review in January. It was not in line, however, with the indications in general that the credit crunch was worse than previously believed and not in line with the data contained in its own accompanying Monetary Policy Statement.
Not »»
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06 Apr 2009
We have been diligently investigating all the data we can locate relevant to the prospects for employment in New Zealand. Despite the negative sentiment coming through we cannot find the widely expected black hole in New Zealand employment.
We have been saying for over a year that the employment market is easing, but that employment is resilient and not ‘falling out of bed’. There »»
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03 Apr 2009
The balance of payments experienced a blowout in the year ending December. This was the result of high oil prices, reduced tourism receipts (partly due to a strong NZ$), and divestment from New Zealand as our interest rate differential shrank and investors the world over panicked. Looking forward, oil will no longer have the effect it has had in recent times. The questions are more about what »»
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01 Apr 2009
The next couple of years will be a true test of leadership. Without doubt, the global economy is facing a series of challenges that will not be quickly overcome. But here in New Zealand, we risk talking ourselves into a downturn much deeper and longer than is really warranted.
We have been diligently investigating all the data we can locate relevant to the prospects for employment in New »»
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12 Mar 2009
New Zealand needs to look beyond cuts to the official cash rate to save the economy.
A cut to the OCR will make no difference to economic activity in New Zealand. We need to look at other economic instruments to stem job losses, such as the RB printing more money and lending it to Government for worthwhile infrastructure projects.
The New Zealand government, the New Zealand officials need »»
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Investment and production prices continue to rise despite the recessionSo thats what happened to all those sheep!!Stick to the facts: employment is still growing!Salad is good – Just not fruit salad … or potato saladIt's guesswork time again?Producers’ prices continue to climb in the September 08 quarterInterest rates and uncertainty underpin BOP changesCapital goods index up 3.8% on the yearFood prices ease in October 08Labour costs continue to riseInflation hits 5.1% - Whoop de do!Food prices ease in September but still high!Economic turmoil blows multi-billion dollar hole in the side of government accounts and deflates economyPetrol and interest rates - is there nothing else to discuss?Saveloys no longer in the Kiwi food basketMigration flows firm in July 08Producers prices outputs index 8.5% up on the year to June 2008Capital goods price index up 3.5 percent on the year to June 2008 quarterMixed messages in the housing marketEmployment is still growing ... but slowerBig Mac Index suggests the NZ$/US$ is spot on
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