New Zealand economy

It is hard to find true indications as to what the New Zealand economy is doing - largely due to the fact that the New Zealand media largely keeps us ill-informed.

Manufacturing dips after good start to year

New Zealand Herald

11:35 AM Tuesday Sep 13, 2011

The volume of manufacturing sales fell 0.7 per cent in the June 2011 quarter, after a 1.4 per cent rise in the March 2011 quarter, Statistics New Zealand said today.

"The trend for manufacturing sales volume, which gives a longer-term picture of movements, has been fluctuating for several years and is now 7.6 per cent below the September 2007 quarter peak," industry and labour statistics manager Kathy Connolly said.

Decreases in the seasonally adjusted sales volumes were recorded in the June 2011 quarter for nine of 13 industries, with four increasing.

The main contributors to the fall in the volume of manufacturing were:

• chemical, polymer, and rubber product manufacturing down 5.4 per cent.

• meat and dairy product manufacturing down 1.2 per cent.

• petroleum and coal product manufacturing down 2.6 per cent.

Partly offsetting these falls in sales volume were a 3.1 per cent rise in the beverage and tobacco product industry and a 5.9 per cent rise in the printing industry.

Rising prices in most manufacturing industries have led to the value of sales rising 2.1 per cent in the June 2011 quarter.

The main contributions to this increase came from two industries:

• meat and dairy product manufacturing up 4.9 per cent.

• petroleum and coal product manufacturing up 7.6 per cent.

Statistics NZ said these two industries also contributed strongly to the 14 per cent increase in the trend for total sales value since the September 2009 quarter low-point.

ANZ economist Mark Smith said the data was weaker than market expectations and the test now would be how well the manufacturing sector and the economy in general navigated an increasingly turbulent global scene.

"The still high New Zealand dollar, fickle global economy, and declines in overseas manufacturing surveys suggest a number of challenges ahead for manufacturing exporters," he said.

NZ Food prices fall 1.3%

Voxy

Tuesday, 13 September, 2011 - 11:17

It will be interesting to see if this is due to seasonal adjustments or is part of a defaltionary pressure as the world moves into depression.

Food prices fell 1.3% in August, driven by a 5.9% decline in the price of fruit and vegetables. Fruit and vegetable prices tend to be volatile from month to month reflecting the effects of weather on crop yields, and the decline in August follows some strong results in recent months. Nonetheless, there was an easing in the price of other food categories as well.

Meat prices fell 0.9% in August, largely reflecting increased discounting in the price of fresh chicken. Meanwhile, grocery prices also eased on the back of increased discounting of discretionary food items including cheese, cakes and yoghurt.

The price of restaurants and takeaways remained flat in August. Given labour costs makes up a large proportion of the input cost in this category and wage growth has been recovering in recent months, it appears restaurants have found it difficult to raise prices in the face of subdued household demand.

Implications

Food prices increased 6.6% in the year to August, including the effects of last year's GST increase which we estimate boosted prices by around 2.2%. While well below the double-digit food price inflation seen in late 2008, this highlights the higher living costs facing households over the past year.

Nonetheless, the easing in August adds to recent inflation indicators which suggests the RBNZ has some breathing space on the inflation front for now. With the volatility in global markets dominating the RBNZ's attention for now, we expect the RBNZ will leave the OCR on hold at the MPS this Thursday.

40% of NZ has considered solar power

Wouldn't it have been wonderful if the government had considered this sufficiently important to provide some incentives.

Forty percent of Kiwis have considered installing solar power to counter the rising cost of electricity, according to the findings of a survey of electricity providers.

The survey by Canstar Blue revealed that New Zealanders across the country are increasingly concerned about the cost of electricity and 40% of consumers have considered switching to solar power.

For article GO HERE