General News

Promising signs of recovery

A recent bank survey indicates a recovery in the pivotal manufacturing sector is well underway.

 

Given manufacturing is the biggest employment sector in Auckland and the second largest across the country, the signs of a steady recovery will be good news for the economy.

 

Bank of New Zealand forecasts annual growth in manufacturing  to top 8 per cent by the September 2010 quarter, breaking out of the recessionary depths of the last year.

 

The BNZ-Business NZ performance of manufacturing index issued on May 13 shows manufacturing hit its highest level of expansion in April since 2004.

 

The survey shows manufacturing jobs were up one per cent in the march quarter, about 2,300 jobs.  The improvement was widespread across all manufacturing industries, regions and firm size categories.

 

Food prices also stabilising


Food prices fell 0.5% in April latest official figures show.

 

Food prices are now just over 3 per cent below their mid-2009 peak.

 

Statistics New Zealand says food prices have returned to levels last seen in late 2009. 

 

Prices for meat, poultry and fish fell 2.6 per cent in April.

 

Overview of Prices for March 2010 quarter


In the March 2010 quarter compared with the December 2009 quarter:

 

  • The consumers price index (CPI) rose 0.4 percent.
  • Food prices rose 1.0 percent, with the main contribution coming from higher grocery food prices.
  • Transport prices rose 1.1 percent due to higher prices for petrol.
  • Recreation and culture prices fell 1.4 percent, with lower prices for audio-visual equipment.

From the March 2009 quarter to the March 2010 quarter:

  • The CPI increased 2.0 percent.

 

 

Geoff Bascand

20 April 2010

Government Statistician 

 ISSN 1178-0452

 

Gross domestic product (GDP):

  • Economic activity was up 0.8 percent in the December 2009 quarter, following a 0.3 percent increase in the September 2009 quarter.
  • Manufacturing activity was up 4.5 percent, after seven quarters of decline.
  • Gross domestic product contracted 1.6 percent in the year ended December 2009 compared with the year ended December 2008.

On the expenditure measure of GDP:

  • The expenditure measure of GDP was up 0.8 percent in the December 2009 quarter.
  • Household consumption expenditure was up 0.9 percent.
  • Inventories were built up by $172 million this quarter, following three quarters of run downs. 

 

Productivity Statistics: 1978−2009


Labour productivity fell 1.5 percent in the year to March 2009, Statistics New Zealand said today. (16 March 2010)

 

The decline in labour productivity was driven by the fall in output– that is, real GDP – of 2.2 percent, while workforce hours fell 0.7 percent. The recent decline has not significantly affected the long-term trend, with labour productivity growing by 1.9 percent annually since 1978.

 

"Productivity declined in the March 2009 year as the New Zealand economy went into recession. There was a large drop in output, with labour taking longer to respond to the fall in demand. This led to a significant fall in labour productivity," economic statistics development manager Jude Hughes said.


The output decline in the March 2009 year was driven by falls in the manufacturing and construction sectors. The labour market weakened during this time as the unemployment rate increased to 5.0 percent by the March 2009 quarter and firms reported that finding staff was easier than it had been for more than 30 years.

 

The long-term trend of more capital being available to each worker continued in 2009. Capital investment increased steadily, up 3.3 percent, while workforce hours declined. Looking at labour productivity from a different angle, additional capital helps workers boost their productivity. However, in 2009 this was more than offset by factors such as process or knowledge improvements – known as multifactor productivity – which fell by 3.1 percent. Overall, labour productivity declined.

 

The productivity measures cover the part of the economy referred to as the ‘measured sector’. Industries excluded are government administration and defence, health, education, and commercial and residential property services.