Weakness persists

Weakness persists – 8 June

Statistics New Zealand has released its Survey of Manufacturing showing a 2.7 percent drop off in volumes, with only rising prices keeping sales in positive territory. The New Zealand Manufacturers and Exporters Association (NZMEA) say that this result should lead the Reserve Bank to deliver a lower for longer message on Thursday.

The Treasury has added to this concern in their Monthly Economic Indicators report saying that slower consumption growth provides some “downside risk” to their 0.8 percent growth forecast for the March quarter.

NZMEA Chief Executive John Walley says, “The Survey of Manufacturing backs up the results from our own survey which has demonstrated that any recovery is still very patchy. It is also important to note that commodity prices are extremely volatile so relying on persistent price rises to fuel the recovery would be a dangerous move.”

Statistics NZ

“This picture is not one of a fast recovery that needs to be slowed,” says Mr Walley.

“Weak employment statistics in the United States, persistent worries about financial stability in Europe and even concerns in Australia are significant risks to a real New Zealand recovery. We have said it before and repeat it again, a rate rise now would be jumping the gun.”

ENDS

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