Economic Survey of Manufacturing: March 2000 quarter
Manufacturing Growth Sustained by Recovery in Agricultural Sector
Manufacturing sales rose by 2.0 per cent in the March 2000 quarter after seasonal variations were removed, according to
Statistics New Zealand's latest Quarterly Manufacturing Survey.
However, if the effect of price increases is removed, the overall volume of sales increased by 0.6 per cent.
Over half the increase in sales came from meat and dairy product manufacturing which recorded seasonally adjusted sales
of $3,013 million. This is 5.1 per cent higher than the December 1999 quarter and exceeds the previous highest quarterly
total of $2,915 million achieved in March 1996. After adjusting for inflation, sales increased by 3.8 per cent. Sales of
meat and dairy manufactured products fell sharply between September 1998 and June 1999 due to falling world prices and
the effects of successive droughts, which reduced livestock availability. However, the current season, which commenced
in September 1999, has benefited from favourable climatic conditions, stronger overseas markets and a lower New Zealand
dollar.
If meat and dairy processing industries are excluded, sales volumes for the remaining manufacturing industries are
estimated to have fallen 0.2 per cent over the quarter.
The upturn in sales, which began in the June 1999 quarter, coincides with a depreciation of the New Zealand dollar. The
Trade Weighted Index (TWI) which measures the relative exchange rates of New Zealand's major trading partners was 10.3
per cent lower in March 2000 than in May 1999. The lower New Zealand dollar has both increased the returns to New
Zealand exporters and the cost of imported intermediate goods which feed into domestic production. The price of
manufacturing inputs, as reported in the Producers Price Index, were on average 1.3 per cent higher in the March 2000
quarter.
Ian Ewing
DEPUTY GOVERNMENT STATISTICIAN