The engine room of the economy is spluttering into life - thanks in large part to the meat and dairy sectors.
Figures from Statistics New Zealand for the December quarter show that the seasonally-adjusted volume of total manufacturing sales rose 1.1%, following a 0.9% fall in the September 2024 quarter, while wholesale trade sales had a seasonally-adjusted gain of 0.3% in the December quarter compared with a 1.2% fall for the September quarter.
These figures are key 'partial indicators' for the December quarter GDP figures due to be released on March 20.
The September quarter GDP figures released just prior to Christmas were a horror show, with our economy having contracted 1.0% in that quarter and (after extensive revisions) it was revealed our economy went backwards 1.1% in the June quarter of 2024.
The December quarter business figures released on Tuesday will bolster expectations that the economy did make it back into positive growth territory in the quarter. The Reserve Bank has forecast that GDP will have grown 0.3% in the quarter.
These figures suggest it may have been a little better than that - although the economy's by no means taking off at this point. Improvement will, however, be welcomed.
The current surge in global meat and dairy prices had a great deal to do with the turnaround in the manufacturing figures.
Stats NZ says meat and dairy product manufacturing sales volumes rose a seasonally-adjusted $253 million (3.1%) in the December 2024 quarter, compared with the September 2024 quarter.
When excluding meat and dairy, manufacturing sales were flat (0.0%), compared with the September 2024 quarter.
Stats NZ said that when adjusting for seasonal effects, in the December 2024 quarter compared with the September 2024 quarter sales in 12 of the 14 New Zealand industries increased.
Electricity, gas, water, and waste services (down $3.1 billion); manufacturing (up $836 million); and construction (down $457 million) industries had the largest movements in sales.
Stats NZ said the decrease in sales for electricity, gas, water, and waste services was driven by wholesale electricity prices dropping back down after a peak in the previous quarter.
2 Comments
Under the column alongside, the latest poll results etc, I made a relatively innocuous comment viz, “there are indications, for instance the uplift in primary production optimism, that the economy is improving.” Ok PDK lift the 12 gauge down again. Both barrels this time?
"The economy is showing signs of life". Only a smattering. The housing economy is still in the doldrums.
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