12 JUNE 2013Stuff.co.nz
Growth data hit by Tiwai
Edited by : AL CIRCLE
3 min read
The Tiwai Pt aluminium smelter has partly caused the end of a 15-month streak of manufacturing gains in New Zealand.
Sales volumes of manufactured goods fell 0.6 per cent in the March quarter, data released yesterday by Statistics New Zealand shows, with the volatile metals category dragging the headline number lower with a decline of 6.2 per cent.
The drop in metals was caused by poor aluminium sales volumes, which fell 13 per cent compared to the December quarter, as the Tiwai Pt smelter battled with low international demand and the high New Zealand dollar.
That was offset by a solid performance from the meat and dairy sector in the quarter, with sales volumes up 0.5 per cent. Overall, the picture was a very mixed affair, with seven of the 13 manufacturing industries gaining in the March 2013 quarter, while six fell.
ANZ senior economist Mark Smith attributed the primary industry gain to farmers bringing their animals to slaughter sooner than usual because of the drought, with meat sales volumes making up for reduced dairy production in the period.
But those gains were expected to fade as the year wore on, he said, noting "you can only slaughter your animals once".
Stripping the boost from the primary manufacturing sector from yesterday's figures, and the total sales volumes declined 0.8 per cent.
The drought is also expected to have impacted electricity sales, with generation output from hydro dams on the North Island significantly reduced in the period.
Together, the two factors are expected to weigh on growth in the second and third quarter of this year, with ANZ expecting the economy to grow by 0.2 per cent and 0.8 per cent rate respectively.
Westpac senior economist Michael Gordon was slightly more bearish, saying the weaker manufacturing figures threatened the bank's March gross domestic product forecast of 0.8 per cent.
"We expect that the greatest impact will instead fall in the June quarter, with milk production still down and meat production having been pulled forward," he said.
The soft run is, however, expected to be limited to some extent by ongoing construction activity in Christchurch and Auckland, according to economists.
"Lifting construction sector activity will become an increasingly important source of support, but the fickle global scene, the high New Zealand dollar remain headwinds for the manufacturing sector," Smith said.
Statistics NZ said the trend for manufacturing sales volume was flattening after 15 months of growth.
Sales volumes of manufactured goods fell 0.6 per cent in the March quarter, data released yesterday by Statistics New Zealand shows, with the volatile metals category dragging the headline number lower with a decline of 6.2 per cent.
The drop in metals was caused by poor aluminium sales volumes, which fell 13 per cent compared to the December quarter, as the Tiwai Pt smelter battled with low international demand and the high New Zealand dollar.
That was offset by a solid performance from the meat and dairy sector in the quarter, with sales volumes up 0.5 per cent. Overall, the picture was a very mixed affair, with seven of the 13 manufacturing industries gaining in the March 2013 quarter, while six fell.
ANZ senior economist Mark Smith attributed the primary industry gain to farmers bringing their animals to slaughter sooner than usual because of the drought, with meat sales volumes making up for reduced dairy production in the period.
But those gains were expected to fade as the year wore on, he said, noting "you can only slaughter your animals once".
Stripping the boost from the primary manufacturing sector from yesterday's figures, and the total sales volumes declined 0.8 per cent.
The drought is also expected to have impacted electricity sales, with generation output from hydro dams on the North Island significantly reduced in the period.
Together, the two factors are expected to weigh on growth in the second and third quarter of this year, with ANZ expecting the economy to grow by 0.2 per cent and 0.8 per cent rate respectively.
Westpac senior economist Michael Gordon was slightly more bearish, saying the weaker manufacturing figures threatened the bank's March gross domestic product forecast of 0.8 per cent.
"We expect that the greatest impact will instead fall in the June quarter, with milk production still down and meat production having been pulled forward," he said.
The soft run is, however, expected to be limited to some extent by ongoing construction activity in Christchurch and Auckland, according to economists.
"Lifting construction sector activity will become an increasingly important source of support, but the fickle global scene, the high New Zealand dollar remain headwinds for the manufacturing sector," Smith said.
Statistics NZ said the trend for manufacturing sales volume was flattening after 15 months of growth.
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