Tag Archives: Statistics NZ

Meat and dairy lead manufacturing rise

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Meat and dairy products dominated the rise in total manufacturing sales for the September 2012 quarter, according to Statistics New Zealand.

After adjusting for seasonal effects, the value of total manufacturing sales rose 1.6 percent ($370 million), led by the 9.3 percent increase in meat and dairy product manufacturing.

When price changes are removed, the volume of manufacturing sales rose 2.6 percent, also led by meat and dairy product manufacturing, up 13 percent.

“The volume increase in meat and dairy manufacturing is reflected in the rise of export volumes for dairy and meat products, with increases of 32 percent in dairy and 15 percent in meat,” industry and labour statistics manager Blair Cardno says.

“Looking at the longer-term picture, the trend for manufacturing volumes has risen in the past year.”

Without the meat and dairy industry contribution, the volume of manufacturing sales fell 1.4 percent in the September quarter.

Value of exported goods, including meat, falls

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The value of New Zealand’s exported goods fell $423 million (11 percent) to $3.5 billion in October 2012, compared with October 2011, says Statistics New Zealand.

“Almost half of the fall in export values was due to the falling value of dairy,” industry and labour statistics manager Louise Holmes-Oliver says. “This was despite an increase in dairy quantities.”

The value of imports rose $70 million (1.7 percent). Contributors to this rise were capital goods, up $94 million, and consumption goods, up $64 million, while intermediate goods fell $83 million.

The trade balance for October 2012 was a deficit of $718 million (21 percent of exports). This compares with a deficit of $226 million (5.8 percent of exports) in October 2011.

Seasonally adjusted exports fell 14 percent compared with September 2012. There was a large fall in milk powder, butter, and cheese exports, following two large decreases in August and September. Seasonally adjusted imports fell 8.0 percent in October 2012.

The seasonally adjusted meat and edible offal commodity grouping fell by eight percent ($39 million), with quantities down 12 percent. This follows increases in both values and quantities in September 2012. Trends show that the group has been rising since its most recent low point of March 2011 and is one percent lower than its high of July 2011.

The trend for exports remains at a high level, but is 6.3 percent lower than its peak of November 2011. The trend for imports has shown little change in recent months, and is now 7.0 percent lower than its record high of September 2008.

Meat exports contribute to trade surplus

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Meat and edible offal export values – New Zealand’s second largest export commodity – have contributed to a seasonally adjusted trade surplus of $147 million,  led by an increase in exports, according to new merchandise trade figures released today by Statistics NZ.

The surplus follows trade deficits of $698 million in the March 2012 quarter and $581 million in the June 2012 quarter.

Exports rose by 5.1 percent to $11.9 billion in the September 2012 quarter, says Statistics NZ. While the increase was led by a rise of 16 percent ($450 million) in the value of milk powder, butter and cheese, meat and edible offal  was also up 10 percent in value ($128 million), with quantities up 14 percent. Value increases for fruit and wine also contributed.

The trend for exports is 1.8 percent lower than its record high of September 2011.

 

Primary growth coupled with energy efficiencies

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Growth in the primary sector has been coupled with energy efficiencies, according to Statistics New Zealand.

Data from SNZ’s latest Energy Use Survey shows that overall energy use by the primary sector was almost 35,000 terajoules (TJ) in 2011 and one-third of businesses had energy saving technologies. Total energy use in this sector stayed steady in the last three years, while the sector’s contribution to gross domestic product rose nine percent.

The total energy used in the sector equates to enough diesel to make two million trips from Cape Reinga to Bluff in a medium-sized diesel car. “While this sounds like a lot, the primary sector actually uses a relatively small proportion of New Zealand’s total energy. It makes up less than 10 percent of total business energy use,” energy statistics manager Hamish Hill said.

Agriculture, the biggest industry in this sector, uses almost half the total energy. Diesel and electricity remain the main energy types. “Diesel is integral to our production of timber, livestock, and crops. This contrasts with the industrial and trade sector, which is more reliant on natural gas and other energy types, such as coal.”

This is the second time that energy use data has been collected for the primary sector. The New Zealand Energy Use Survey covers each of the primary, industrial and trade, and services sectors over a three-year period.

Glimpse of NZ economic growth, hold firm

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The latest figures from Statistics NZ show a glimpse of improvement in economic activity, with a rise in gross domestic product (GDP) of 1.1 percent in the first three months of 2012, helped in part by primary food manufacturing, including meat. However, economists say it won’t necessarily result in a cut to New Zealand’s OCR anytime soon and the NZ government is intending to continue on its current course.

Compared with the March 2011 quarter, economic activity in the March 2012 quarter was up 2.4 percent. For the year ended March 2012, economic activity was up 1.7 percent compared with the year ended March 2011.

The main contributors to the increase were: manufacturing (1.8 percent), primarily primary food manufacturing and metal product manufacturing;agriculture (up 2.3 percent) mainly driven by an increase in milk production; and business services (up two percent), which include professional, scientific, technical, administrative and support services.

“Continued good growing conditions have been a major factor in the growth this quarter and it is reflected in both the milk production in agriculture and in meat and dairy manufacturing,” says Statistics NZ’s national accounts manager Rachael Milicich.

The expenditure measure of GDP was up 0.8 percent in the March 2012 quarter, due mainly to investment in fixed assets, a $416 million build up in inventories as supplies of goods produced exceeded demand and a small increase in the volume of spending by NZ households.

Picking up the pace, “right on cue”

Westpac economists say the bottom line is that the pace of growth is picking up in 2012 “right on cue after a prolonged recession an the disruption of several earthquakes.” Senior economist Michael Gordon comments, however: “The composition of growth is likely to change in coming quarters, as exports slow and reconstruction activity picks up, but we are on track for an acceleration in overall activity this year.”

He says interest rate markets are now pointing to a one-third chance of an OCR cut later this year.  “We broadly agree with this pricing, although we don’t think today’s figures really shifted the odds much – the Reserve Bank made it clear in its June Monetary Policy Statement that the case for cutting rates depends on a nasty turn of events in Europe.”

While the figures represent a major upside surprise to RBNZ’s forecast of 0.4 percent growth, Westpac thinks that today’s result will not prompt the RBNZ into raising interest rates any sooner than it was already intending.

Government holding course

The government is maintaining its firm hand on the tiller. While the economy grew more strongly than expected in the quarter “despite ongoing economic and financial uncertainty in other parts of the world,” Finance Minister Bill English says: “What’s important for the Government is taking a long-term view of building New Zealand’s competitiveness and productivity, which will help us deal with headwinds from the uncertain global environment. That’s the focus of our economic plan.”

Export meat price fall confirmed, but temporary

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A fall in merchandise export prices for meat products has been confirmed by Statistics New Zealand in its latest figures comparing the March 2012 quarter against December 2011. However, this is expected by some to be temporary and export prices should improve later this year.

Overall, merchandise export prices fell by 3.8 percent in the same quarter, reflecting a 5.5 percent appreciation of the New Zealand dollar (according to the Reserve Bank’s trade weighted average). Amongst the falls for major commodity groups, prices for meat products (especially lamb), which accounted for 12 percent of exports, were down by 3.6 percent in the quarter, while other price falls were recorded for dairy (-5.6 percent) and forestry (-4.2 percent) products.

New Zealand’s merchandise terms of trade (the ratio of export prices to import prices) fell by 2.3 percent in the March 2012 quarter when compared with December 2011 – the third consecutive quarterly decrease since the terms of trade peaked in the June 2011 quarter, Statistics NZ says.

Looking at the wider market implications, Westpac’s senior economist Anne Boniface says the  data broadly confirms Westpac’s understanding of the NZ economy and on its own won’t change the outlook for the Reserve Bank. “Nonetheless, export prospects are certainly dimming this year. But while acknowledging the near–term weakness in commodity prices and its impact on the NZ economy, we must keep the recent moves in perspective – the terms of trade remains 10 percent above its average levels of the last decade,” she says, adding that current weakness is expected to be cyclical rather than structural. “By the final quarter of this year, stimulatory policies by authorities in China should be starting to gain traction, boosting growth and demand for commodities. Consequently, we expect to see commodity prices stabilise and start to improve.”

Boniface remains firmly optimistic about prospects for New Zealand export prices over a longer horizon, she says.