new zealand economy

7/29/2019 New Zealand Economy

1/10

DavidGut

sell CurtinGS

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BEconomics

conomic

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forManagers55

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tional

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1Assessment

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Case

ount: 214

2 29/03/12

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Lecturer:Gavi

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Page1


2/10

DavidGut

sell CurtinGS

Executive

New Zeala

Introducti

Aims and

Overview:

Relevant

Policy Dil

Recomme

Reasons f

Relevant

Summary:

Conclusio

BEconomics

Summary:

nds Loss

on:

bjective

conomic

mma and

ded Polic

r Recom

heory an

for this r

forManagers55

f Competi

f Report

onditions i

why the a

Direction

endation

Data anal

port

1Assessment

onten

itiveness

n New Ze

dress

:

ysis

2 29/03/12

ts

land

Lecturer:Gavi

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Page2


3/10

DavidGut

Execut

With sofor the r(RWC)a high,peopleoutlookExcelleGDP grhas pai2011 othe bac

Signalsat the emarginsDecemLookinof thisspendinChristcZealandas the rforecast

The glo

Greece,more stfinanciathe 30probleWith thover theproductpaymenwill coaction nand bei

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ive Summ

me signs thest of the Nheld in Newhilst the ea

nd injuringfor the yeart growing cwth in theted a mixeda peak withof the RW

from a goodd of last yecoming uner quarter Gat the year

ear. Consug will slow iurch rebuilfor Australibuild creates released sbal econom

further rouengthened el markets. Cincrease ins with the fit considerepast decade

ivity will rets to dairy ftinue to creow with refg taken ove

BEconomics

r : As at

global ecow ZealandZealand lasrlier Februamany moreahead is laronditions inecember q

picture of tcore salesalthough t

deal of ther (even thoer pressure,DP growthin front GDer and busin the Marchdue to furt

a suggest umomentu

pporting thhas stabilis

d of econoconomic dahina has incNew Zealannancial systNew Zeala

. The exchauire an ecormers fromte economirms or facer by oversea

forManagers55

arch 201

omy is stabiconomy att year in they 22nd earthas put a neely consistethe dairy inarter , althoe state of ecolumes liftiere were in

est of the ecgh remainincorporate pt 0.7% is ingrowth isess confidequarter as ter sporadicderlying wein 2013. TGovernmed over the

y cut backs,a from Unitreased its mids producti

and voland needs toge rate is pomy wide pmilk procesdilemma fothe transitios superpowe

1Assessment

lising and whe end of 2third and fouake that stative spin ont with theustry hint t

ugh with theonomy at thg by a recoicators of t

onomy werg at a veryofits wereline with firrojected toce made goe level of aquakes andakness in the look aheats budget past couple

much longd States halk production. Neverth

ility will reddress the lrt of the prerspective aing giant Fr New Zealn of a downr such as C

2 29/03/12

ith a few ris11 is further h quarters

ruck Christcn the overallation advisat net exporrelease of aend of last

d 2.9% witngible unde

irregular. Tigh level) aostly passivbut ungla

ake a bow bod starts totivity adjus0000 peoplbuilding mremains m

licy statemonths with

r term refine helped ton 4 fold in tless there aain for the

oss of compblem, imprd lateral renterra decrend. This coard spiral t

ina.

Lecturer:Gavi

s remaininvaried. Thhelped boahurch at 12.financial syry bank latets made a lativity datayear. The redefinitely t

rlying dema

he terms ofd amongst se in the secoorous forecfore pickin

he year hows after the Rfrom thererket will costly inline

nt earlier thin agreeme

ncing operaupport sente last ten ye many unrrojected futitiveness sving compeorms, the lasing and thntry needs ta second

inForster

g, the explaRugby Wo

t the retail s0pm killin

stem howevst forecasts.rge contriburom the satail sector ee bulk comi

nd as well.

trade grounigns of prodnd half of 2asts.up toward

ever consuWC. Delayleaving Nentinue till sith the late

s year.t on the bail

tions with biment in gloars surpassisolved strucure.een in the ecitiveness anest round oageing po

o take signiforld econo

Page3

ationrld Cupctor to288the

ion toe perioddedng fro

lowerucers11.

the enderin the

ch timet set of

out for

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onomyd

ulationicanty status


4/10

DavidGut

Introd

This rethe globtransparthroughand thethat Ne

The coexplainNew Zegrowthassets

Overvi

The natiBudgetweakerdomesti2012 eatreasuryHowevweakereconom

Figure

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ction

ort will emal financialency systedestabilisatiarising of C

Zealandspetitive ed

the rationalaland Goverrate of the e

ew:

on advisoryPolicy Stateoutlook forc front, delarly 2013, pas updated fr, ongoing rforecasts.y (see later

1 Real G

BEconomics

hasize the frisis betterin place, hoon in foreigina as majobiggest ovee that the cwhy this hasnment is foronomy thro

bank of lateent (BPS).

he year ahes to the Catly explainrecasts is al

isks in the ghile there arn), the und

DP

forManagers55

ct that evenhan other cwever NZ icurrency i

r economicseas exportuntry had hhappened ainfrastructuugh increase

released a sThe forecasd underpinterbury rebhe outwardso a functioobal econohesitant si

rlying issue

1Assessment

though Neuntries andstill highlyother counroducer beommodity (s been lost

nd the way ire to be a md productivi

et of econots present aing the BPSild, which ihift in theof officialy, rising frns of someappear onl

2 29/03/12

Zealand (Nhas a reasonvulnerable tries inclusioming furthMilk Produver the pascan be remans to permty and impr

ic forecastseaker outl

reflects a ns now not erowth profilrevisions tom Europe,degree of stto have be

Lecturer:Gavi

Z) has weatably robustGlobal eco

e Greece anr self sustaits) is underten years adied.A ce

anently lift tved manag

in support ook driven bmber of facpected to ge. The loweDP back-d

re the mainbility emern booted d

inForster

hered the stinancialnomic outcd the Unitednable necessignificant td I will endtral objectihe sustainabment of Cr

f the Goverglobal risk

tors. On thet underwaylevel of G

ata (Figurefactor behining in the glwn the roa

Page4

rm of

mesStatesitatinghreat.avour toe of thelewn

ments. The

ntil lateP in).the

obal.


5/10

DavidGut

The mosales vothe presizeablesales voundoubof last qrose str

Figure

What windustrrose byand intein the D

Figure

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t eye-catchilumes (whicious period2.6% increlumes roseedly owes puarter. Totalngly, with

2- Retail

e do have phelped exp

2.9% on thermediate goecember qu

3- Terms

BEconomics

ng figures rh exclude vthe largest

se in the Sey 2.2% on tartly to thesales volunnual growt

ales and G

ints a mixert volumesquarter. Folds imports,rter.

f Trade

forManagers55

leased to dahicle-relateincrease sintember qua

he quarter augby Worles in Wellih of 9.5% a

oods Cons

picture. Onreach a recolowing a 2.1we expect n

1Assessment

te undoubtespending)

ce the seriesrter too. Incld by 6.8%Cup (RW

gton and Ad 10.0% re

umption

a positive nd high in th% fall in ime exports t

2 29/03/12

ly come frorose by 2.9began in 19uding the vn a year ag) despite ickland (whipectively.

te, good grDecemberort volumemake a siz

Lecturer:Gavi

m the retailin the Dec5(Figure 2)

hicle relate. The strongonly takin

ch both host

wing condiquarter (Fig, driven by lable contrib

inForster

sector. Corember quartand followicomponentretail perfoplace in oned play-off

tions in theure 3). Totallower consuution to GD

Page5

retailr fromng a, totalmancemonthames)

airyexportsption

P growth


6/10

DavidGut

ActivitconsentCanterbthird lo

TurningThe seaconsecuspendinlend soFigure

Figure

But sigremainsunderlyHousehincreaspopulati

steady f

sell CurtinGS

in the consrose strong

ury rebuilder than itsour attentioonally-adjutive rise altg growth. Te support t

4 Consu

5 Nation

s of underlsome way s

ing weaknesld Labours seen in eon. The em

or the third

BEconomics

ruction sectly in Januarathers paceive year aven to this yeasted ANZ Cough it reme mild imprconsumer

er Confi

al Bank B

ing labourhort of the hin the labo

orce Surveploymen aloyment rat

onsecutive

forManagers55

r also remai(up 27% o

later this yerage.r, the outloonsumer Coins below itovement seonfidence i

ence and

siness Co

eakness hoighs reacheur marke toemployme

e only just(the propo

uarter at 63

1Assessment

ns low by ha year agor, the curre

k remains bfidence me

s long-run an in the houthe near te

ouse Pri

fidence

ever, puttiin the mid(Figure 5).

t did edge ueeping pacetion of the

.9% at the e

2 29/03/12

istorical sta, and are likt level of a

oadly in linsure rose st

verage and csing marketm (Figures

es

g things inle of last yeThis has thp by 0.1% iwith the incorking age

d of last ye

Lecturer:Gavi

dards. Whilly to increaproved con

with the Brongly in Feonsisten wiove recent).

erspective,r and thereee elementsthe Decem

reasing sizepopulation i

r.

inForster

new dwellise further asents is almo

S forecasts.bruary its thth just modonths may

usiness coare signs of. First, whilber quarter,of the workin employme

Page6

ngthest a

irdstalso

fidence

heng agent) was


7/10

DavidGut

Second,laboura discototal nusince thnumberare somwage grFigure

The heaThe incZealandsystemthe incrpopulatiresidentFigure

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the fall in tarket partic

uraged worber of jobllabou ma

of people wetimes referowh, despit

6 Total J

lth sector iseasingly els ageing pond the Govase will beon increaseial housing

Residen

BEconomics

e unemployipation rather effect ass people.ket was at itho are availed to as dise the weak

obless Pe

in for presserly populatpulation wilrnment. NZmong thos

of 30 perceill be requiial Invest

forManagers55

ment rate inr than a sigpeople havf the 110,0

s tightest, arble for worouraged woutlook for c

ple Break

re as elderlion creates cl generate ets populatioaged 65 yet will havered (Figureent

1Assessment

the Decemificant incrdropped o0 rise in tot

ound a third, but are norkers. Finallnsumer pri

own (000

will makehallenges thical and fiwill increars and over.47 percent)

2 29/03/12

er quarter wase in emplt of the labal jobless peof the increactively sethere is lit

e inflation.

)

p most of tat must be hancial compe by 12 perIn compari

increase in

Lecturer:Gavi

as driven byyment. Butur market.ple seen ose reflectsking it (Figle sign of ac

e expected sigh on healtlex challengent by 2036on Australiver 65 year

inForster

a modest dthere is evihis shows uer the past fn increase ire 6). Thesceleration i

urge in popagenda. N

es for the he, but 75 percwith a total

olds. Furthe

Page7

cline inence of

in theur yearsthepeoplereal

lation.walthent of


8/10

DavidGut

Howevindex isdown 9low in tFigure

Non-coaroundthe outlHowevand finremain.

The NevaluedZealandAustralithe worlthree mFigure

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r, there areexpected to

from a pehe latest auc

Real Im

modity ex0% of totalok for ther, many of tncial conditi

Zealand dt just over-US exchanan dollar itd's most tranths ahead

Real Im

BEconomics

igns of comshow furthek in May 2ion in mid-

ports & Ex

orters, whicexports arelobal econohe underlyions to rema

llar has riseS81c whice rate is cloasn't been qed currencif the Austr

ports & Ex

forManagers55

modity pricr falls in wo11). The priebruary (Fi

orts

h are outweilso at the wy has stabi

g problemsin volatile f

n rapidly siis up arounse to its higuite as strons, the Newlian dollar

orts

1Assessment

s easing barld prices foce of Fonteure 8).

ghed by thehim of develised somewremain unsor the forese

ce Decemb7.5 per ce

est level sig - up arounealand doll

nd the Nor

2 29/03/12

k. ANZs FNew Zeala

ras dairy pr

ir commoditlopments inhat over thelved and weable future

r last year.t from thece it was flod 1.4 per cear has beenegian kron

Lecturer:Gavi

bruary comds exports

oducts fell 3

cousins buthe global epast few mexpect globt the minut

t the timeiddle of Deated in Mart since mid-he fastest ri. (Figure 9)

inForster

modity pric(which are% to a two-

t still accouonomy. Allnths.l economic, but plenty

f writing itember. Theh 1985. AgDecember.ser over the

Page8

lreadyonh

t forin all,

of risks

asNewinst themong

past


9/10

DavidGut

Recom

The Neand Entand areis to secNew Zesectordistanccan beGovernalternatiGovern

creationthe secteffort hSuch efcreationpracticeour couare incrand inteNew Zesystemwhen s

AgreemresearcDistancto Austcountridecreasneutral

The treAustraliglobal gaccordiespecial

good qThe Neeconomwe havpoliticalZealandShouldOK recexportsexchanZealandNew Ze

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mended P

Zealand erprise (NZwhich coul

ure this invalands locaill always sto market.ompetitiveent policie

ve energyent invest

and dissemir. As high-s been chaniciencies arof value fos have led ttry, with prasingly adornational coaland has auitable for tipping to C

ent which eed countrieis a main d

alia than fros. New Zeaits tax ratend efficientd for the Na, Canada arowth as degly as invely China. N

ality farm bZealand d

y. Our bankia stable ecdebates). R's prospec swe be worrintly, despiton world me rate has bgoods andaland dollar

BEconomics

licy Direc

onomy hasE) has idend attract sigstmen.ion in the Sruggle to coowever, fond make awhich incr

ill provide tent into res

nation, andalue manufnelled into ccreated bythe consumgreater distduction oc

pting leanpetitivene

igh volumeransport ofina, but pot

ists betweeto have ne

rive of them other worland will deto 28% - 29in the OECw Zealandd Brazil, isand for the

tors seek tow Zealand i

sed food anllar's rise isng system inomic andlative to th

seem a lot rd about a hia sluggishrkets haveen high. Deervices oveexchange ra

forManagers55

ion:

the potentialified the higificant forei

uth Pacificmpete in Euhigh-value

ompelling vase energye springboarch institu

has a strongcturing hasreating efficeliminatinger or end-usribution of purring closeanufacturins.of importsoods fromntially thes

New Zealaotiated suchost of shippldwide destirease its ta

from 30%.

urrency hasbeing vieweir commodittake advantn paticular

d materials.also partlysound, govolitical envimoribundsier.gh New Zeaorld econo

een high. Inmand for kiseas. This rte.

1Assessment

to expand rh-value magn investme

means thatropean andmanufacturalue proposiefficiency ard for countes and tech

influence obecome an iiencies in bhe expenditr. Within troduction, ar to geograpprinciples

nd exportsll major cenare more t

nd and Chinan agreemeing. New Znations duerate to 28from 2014.

been up sind as part ofy exports inge of theiris seen as pr

vote of cornment deb

ronment (deconomies o

land dollar?my. This is ldeed, high pi dollars hises the pri

2 29/03/12

pidly in cerufacturingnt. The chall

ass-producorth Amerid products,tion.d acceleratries to leapological de

the growthncreased foth manufacure of resoue high-valullowing desihic markets.o improve t

nd consequtres. Higheran offset by

a. New Zealnt with Chialand has to the closefrom 30% fNew Zeala

e the earlycool countrease. Thesxport succeoducing wh

fidence in tt is low by dspite whatEurope, Ja

Well, our eargely becarices for ours risen as ae of the kiw

Lecturer:Gavi

tain sectors.nd servicesenge for Ne

ion firms oan markets,

New Zealan

the demanhead in coelopments

and ongoinus for develuring and bces for anymanufactun and protNew Zealaeir producti

ntly has athan averagthe bi-later

nd is the oa.e least experoximity berom 2012, ads tax syst

000s. Newies club thecountries'

ses in growit the world

e underlyineveloped coight be percan, or even

ports havese the priceexports areesult of higrelative to

inForster

New Zeala(HVM&S) sw Zealand b

tside the prisimply due

d based pro

for cos-effpetitivenessosters know

competitivoped econosiness procother goal ting sector, ltyping at hod-based covity, profita

ell developcosts are i

l Free Trad

ly one of th

sive shipmtween thesend Australiam is one of

ealand, witmain benefurrencies hng markets,wants and n

stability ofuntry standaeived from ithe US, Ne

enerally befor New Z

partly why ter sales ofther curren

Page9

d Tradeector asusiness

maryto theuction

ctive.ledge

ness ofies,sses.an theanme inpanies

bility,

d portscurred

nt coststwowillthe most

hctors ofve risen

eds

therds, andnsular

n doingaland'sheewies the


10/10

DavidGut

SummWhen ameasurithink inrelationexchanweightewhen asCommoreflecticompeti

compossmall pcompetiand widA rise iincomeIn additrest of tour savi

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ry:

sessing a cng it againstter s of effto a baskete rate moved index is asessing a con measuresg the fact thtiveness is

ition of a cort of total otiveness ande ranging rethe value o

in this counion, a high dhe world. Tngs goals, r

BEconomics

untrys co. Bilateral ective exchaof other co

ments to givwell-knownuntrys comrequently cat this sectoore compli

ntrys outptput in Neproductivitorms.f the New Zry because tollar makesis means thtire earlier,

forManagers55

petitivenessxchange ratnge rates sintries. The

e a broad viexample ofetitivenessntre on theis usually tated than ca

t and exporZealand. Hin the New

aland dollahe price of iNew Zealant we can dor buy more

1Assessment

its importas can only sply weighte help to low of a currn effective

is what partanufacturie most invn be convey

s. Certainlywever, thisZealand ec

r is like a wports goes

d dollar savimore with tgoods and s

2 29/03/12

nt to considhow you sod averagesk through sncys strenexchange raof the econog sector, aslved with tred on a char

, the manufaanalysis hignomy requi

ge rise for edown, whicngs more vose savings

ervices in o

Lecturer:Gavi

r whom it ismuch. It is tf bilateral emetimes voth. The Rese. Another tmy it is thata proxy forde. The notand should

cturing secthlights howres an econo

ery New Zhelps our i

luable comp. We can pur retirement

inForster

that you arerefore co

xchange ratlatile bilaterrve Bankshing to consyou are loothe total ecoion ofrecognise t

r representsimprovingmy-wide pe

alander recncomes go fared to thost less aside tyears.

Page10

mon tos inaltradeidering at.nomy,

e

just a

rspective

iving anurther.in thereach

new zealand economy

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