New Zealand Country Profile - Economy, Currency, Central Bank, New Zealand Dollar, NZD

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Introduction

New Zealand is the 60th largest economy in the world with a GDP of $92.51 billion, and a population of 4.2 million. Its economy depends on international trade, mainly with Australia, the United States and Japan. This leaves it vulnerable to growth conditions in the these economies. It's main exports include meat, dairy products, wood and forest products, fish, and wool. These exports and tourism, along with a declining manufacturing sector, do not match the imports of advanced manufactured goods required to sustain the New Zealand economy. Therefore, New Zealands has a large current account defecit.

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New Zealand's Fundamental Indicators and Chart

Monthly Data for February, 2008

Date	EST	Indicator	Actual	Forecast	Previous
2/4	4:45pm	Labor Costs q/q	1.1%	0.9%	0.9%
		4th Quarter Highlights from the Statistics New Zealand Labor Costs y/y: 3.4% In the year to the December 2007 quarter salary and wages (including overtime) increased 3.4%. For the quarter, labor costs increased 1.1%. The finance and insurance industries saw a higher growth rate of 6.3%.
2/4	9:00pm	Commodity Price Index (ANZ)	-1.4%		0.8%
2/6	4:45pm	Employment Change q/q	1.1%	0.3%	-0.3%
		For 4th Quarter Provided by: Statistics New Zealand Official Release (.pdf) ""Employment increased by 23,000 (1.1 percent) over the December 2007 quarter to 2,173,000. This is the highest level of employment recorded since the survey began. Over the December 2007 quarter, part-time employment decreased slightly, down 1,000 (0.2 percent) to 489,000 while full-time employment increased by 26,000 (1.6 percent) to 1,686,000. Annually, part-time employment grew by 28,000 (6.1 percent) and full-time employment increased by 25,000 (1.5 percent). Female employment increased by 26,000 (2.6 percent) over the December 2007 quarter to 1,010,000. Male employment decreased by 3,000 (0.2 percent) to 1,162,000 over the December 2007 quarter. In the survey (unadjusted) series, there was a significant annual increase in employment in the wholesale and retail trade, accommodation, cafes and restaurants, and property and business services industries.""
2/6	4:45pm	Unemployment Rate	3.4%	3.6%	3.5%
		For 4th Quarter Provided by: Statistics New Zealand Official Release (.pdf) "The December 2007 quarter Household Labour Force Survey (HLFS) recorded a decrease in the unemployment rate of 0.1 percentage points, to 3.4 percent. This is the lowest unemployment rate recorded since the survey began. The number of unemployed people decreased over the quarter while the total labour force increased, resulting in a drop in the unemployment rate. Over the quarter the number of people employed and the number of people in the labour force increased to the highest levels ever recorded by the survey. The growth in the labour force was entirely driven by females. The labour force participation rate of 68.8 percent recorded in the December 2007 quarter is the highest rate recorded in the history of the Household Labour Force Survey. In summary, the December 2007 quarter has seen record-high employment levels, number of people in the labour force and labour force participation, as well as recording the lowest unemployment rate since the survey began in March 1986."
2/12	4:45pm	Producer Price Index Input q/q	1.3%		2.3%
		For 4th Quarter Provided by: Statistics New Zealand Highlights: Current Release Official Release: PDF "Input prices for all industries in the PPI rose 1.3 percent in the December 2007 quarter, following increases of 2.3 percent and 1.3 percent in the September 2007 and June 2007 quarters, respectively. The most significant upward contribution to the PPI inputs index came from a 5.0 percent increase in the wholesale trade index which was driven by the mineral, metal and chemical wholesaling index due to higher crude oil prices. The meat and meat product manufacturing index (up 3.8 percent) was the second most significant driver for the rise in input prices in the December 2007 quarter."
2/12	4:45pm	Producer Price Index Output q/q	1.5%	1.0%	1.6%
		For 4th Quarter Provided by: Statistics New Zealand Highlights: Current Release Official Release: PDF ""Output prices for all industries in the PPI rose 1.5 percent in the December 2007 quarter. This follows consecutive rises of 1.6 percent and 1.2 percent in the September 2007 and June 2007 quarters, respectively. In the December 2007 quarter, the dairy product manufacturing index (up 15.0 percent) made the most significant contribution to the rise in the PPI outputs index. This was driven by higher export prices for milk powder, cheese and butter. The second most significant contribution to the PPI outputs index was the wholesale trade index, which rose 3.1 percent. The main driver in this index was mineral, metal and chemical wholesaling largely due to higher fuel prices."
2/13	4:45pm	Food Price Index m/m	0.4%		0.9%
2/13	6:00pm	Manufacturing PMI	53.3		53.6 53.8
		For January Provided by: Business NZ /Bank of New Zealand Official Release: PDF "The Bank of New Zealand - Business NZ seasonally adjusted PMI for January (53.3) showed manufacturing activity close to the same level as December, although elements of the broader results showed some softening in the sector. All five seasonally adjusted main diffusion indices recorded expansion for the sixth consecutive month, although only deliveries (55.7) and finished stocks (54.5) displayed a higher result than December. Production (51.5) experienced its lowest value since June 2007, and the second lowest January result on record. Employment (51.2) was largely unchanged from December, while new orders (54.1) were at its lowest level since April 2006."
2/14	4:45pm	Retail Sales m/m	0.1%	0.7%	2.0%
		For December. Official Release for Statistics New Zealand Retail Sales ex. Autos: 0.3%, forecast 0.3%, pr. 0.9% Of the 24 retail industries, 13 had sales increases. The biggest increases cam from auto fueland department store retailing. The biggest decreases came from motor vehicle retailing, and cafe and retaurants. For the December quarter, retail sales increased 1.9% compared to the September quarter. Positive contributions came from auto fuel, clothing and softgoods, motor vehicle, and supermarket and grocery store retailing. Higher than usual fuel prices drove automotive fuel retailing up 15.1% for the quarter.
2/25	9:00pm	Inflation Expectations	2.7%	2.8%	2.7%
		Provided by: Reserve Bank of New Zealand "Consumer price index (CPI) inflation expectations for both the one and two year horizons are unchanged since the last survey. Average one-year-ahead Consumers Price Index (CPI) inflation expectations remained at 3.0%, and two-year-ahead expectations held at 2.7%. However, the median two-year rate rose to 2.8%. The increase in the actual CPI in the Decmeber 2007 quarter does not appear to have significantly influenced respondent expectations. Expectations of quarterly changes in the CPI for the next two quarters are little changed. Expectations for the March quarter CPI have risen slightly, from 0.7% last quarter to 0.8% this quarter. An increase of 0.8% is also expected for June 2008. These quarterly increases are equivalent to annual rates of 3.5% for the year to March 2008 and 3.3% for June 2008."
2/26	4:45pm	Building Approvals	3.3%		-5.2%
		For January Provided by Statistics New Zealand - Titled "Building Consents Issues"
2/26	9:00pm	Business Confidence	-43.9	-25.0	-24.9
		For February Release from National Bank of New Zealand "The New Zealand economy is not infallible. A net 44 percent of businesses expect business conditions to deteriorate over the coming year. This level of pessimism is higher than the net 25 percent reported in December last year, and represents a 10-month low. The service, retail and agriculture industries dominated the fall in sentiment, while the pulse in construction ebbed a tad higher."
2/27	4:45pm	Visitor Arrivals m/m	0.0%		-1.2%
2/28	4:45pm	Trade Balance	-.32B	-0.10B	0.03B
		For January Provided by: Statistics New Zealand Official Release: PDF Exports: $3.1B, pr. $3.68B Imports: $3.4B, pr. $3.64B

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December
3rd, 2008

Actual

Forecast

Revised Form

5.00%

6.50%

N/A

Provided by: Reserve Bank of New Zealand
Official Release: Statement

From the Release: "Today’s decision brings the cumulative reduction in the OCR since July to 3.25 percent, and takes monetary policy to an expansionary position. Given recent developments in the global economy, the balance of risks to activity and inflation are to the downside. Thus it is appropriate to deliver this reduction quickly to support the economy and keep inflation from falling below the target band.

“Monetary policy is working together with the depreciation of the New Zealand dollar and the fiscal stimulus now in train, to provide substantial support to demand over the period ahead and to create the conditions for some rebound in growth as global conditions improve.

“To ensure the response we are seeking, we expect financial institutions to play their part in the economic adjustment process by passing on lower wholesale interest rates to their customers."

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