Weak GDP figures demonstrate little progress

Weak GDP figures demonstrate little progress

22 March 2012

Continuing poor Gross Domestic Product figures indicate that little has changed since 2008 say the New Zealand Manufacturers and Exporters Association (NZMEA). Economic activity increased 0.3 percent in the December 2011 quarter, below the Reserve Bank's forecast of 0.6 percent in the March Monetary Policy Statement.

NZMEA Chief Executive John Walley says, “We still haven’t seen any real evidence of a marked turnaround since 2008. Without the increased retail spending from the Rugby World Cup these figures would be, at best, flat. Since then our own survey’s sales numbers have shown a decline in January.”

“Agriculture has trended upwards again due to higher prices and volumes, but weak manufacturing and construction figures are cause for concern.”

“A high exchange rate means that returns on added value exports are continuing to suffer. We will not see strong traded sector growth until this is addressed. Relying on high commodity prices and ever increasing volumes from the primary sector is not a long term strategy for economic growth in New Zealand.”

“We are happy to see considerable cost cutting and efficiency efforts from the Government sector; however, policy action is also needed. Investment in the tradable sector will only happen when predictable returns can be anticipated. That requires action on the exchange rate.”

ENDS

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