In our previous commentary on manufacturing we noted that the first half of 2013 was looking positive for manufacturing. Now the numbers are in for the third quarter of 2013, and we can see the impact that the warm, dry conditions at the beginning of the year has had on manufacturing sales volumes, and in turn the amount of New Zealand meat and dairy products on the international market.
In our previous commentary on manufacturing we noted that the first quarter of 2013 was looking positive for manufacturing. Now the numbers are in for the second quarter of 2013, and we can see the impact that the warm, dry conditions at the beginning of the year has had on manufacturing sales volumes, and in turn the amount of New Zealand meat and dairy products on the international market.
Members of the New Zealand Manufacturers and Exporters Association remain concerned about markets and production capacity, especially pressures on company margins due to the currency. These sentiments have seen net confidence decrease among the businesses surveyed in the latest New Zealand Manufacturers and Exporters Association Survey of Business Conditions.
Monthly trade registered a $304 million deficit in January 2013, following a surplus in December 2012. The decrease in monthly exports of dairy and crude oil, and the renewed strength in imports caused this return to the red zone.
New Zealand’s current account remains in red, with annual deficit increasing to $9.9 billion from $8.8 billion in the same quarter last year.
The annual average percentage change in manufacturing sales volumes recorded small but positive growth in the September 2012 quarter. This was due to an increase in the sales volumes of dairy and meat products, chemicals and non-metallic mineral products.
The October trade deficit declined from $775 million in the previous month to $718 million in October 2012, but remains well above the $226 million deficit in the same month in the previous year. The annual deficit has ballooned to $1.37 billion, from a deficit of $874 million a year ago.
September trade figures is a mixed bag of good and bad news. The good news is, the monthly trade defict narrowed, with dairy exports holding up. The bad news is, annual receipts from exports and trade volume are getting lighter.
July was positive month for New Zealand trade, with a slight trade surplus of $15 million. Yet, our trade deficit increased from $756 million in June to $825 million this month based on annualised values.
“It’s time we got patriotic about our manufacturing industry” So says Labour leader David Shearer after his visit this week to Kiwirail’s Hillside workshops in Dunedin. This is like music to my ears.
In the year to July 2012, the number of visitors totalled 2,633,200, a 5.6 percent increase on year earlier levels.
A surge in dairy and forestry exports contributed to a strong monthly surplus of $331m. June figures showed a 25% increase in forestry export volumes and an 8% increase in dairy exports. However, monthly figures are prone to erratic movements – depending on holidays, shipping timetables and the like.
Lower demand and weaker global prices for our key export products are showing through in manufacturing sales volumes.
New Zealand's trade deficit is ballooning further, as exports continue to struggle and imports continue to increase. The annual deficit for the year to May was $801 million, up $248 million from the deficit for the year to April.
New Zealand’s Balance of Payments current account (external) deficit now stands at 4.8% of GDP, up from the 2.3% and 3.8% recorded in the two previous March years.
A slide in commodity prices and softer demand from China and Australia has led to lower export receipts in April 2012. The latest official trade figures signal weakness in the external sector, with the trade surplus for the month falling to $355 million.
March 2012 trade figures indicate a fall in the value of exports compared to year-earlier levels. Exports were valued at $4.2bn in March, down from $4.6bn in March 2011. Flagship exports such as dairy, crude oil and fruits all recorded lower export revenue this March.
While the increasing number of total overseas visitors is good news for our tourism sector, the largest gains in visitor numbers are coming from Australia (up 56,300) and China (up 30,700). While Australia represents our largest visitor market with 45 percent of all visitors in the year to March 2012, Australians tend to spend small amounts when travelling in New Zealand.
Last week, AFFCO locked out 762 workers indefinitely after talks between AFFCO and the NZ Meat Workers Union broke down. The 762 workers are said to represent 70 percent of the meat workers across Moerewa, Horotiu, Imlay, Wairoa and Manawatu plants.
The New Zealand Manufacturers and Exporters Association Survey of Business Conditions indicate that domestic manufacturing sales decreased by less than half a percent in December 2011 compared to December 2010, while manufacturing export sales increased by 15.4%.
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.