Monthly economic review: December 2014

8 Dec 2014

The Monthly Economic Review is an overview of the New Zealand economy. It includes the latest data on New Zealand’s economic growth, unemployment, inflation, merchandise trade and balance of payments figures, along with certain financial data (such as the Reserve Bank’s official cash rate). The unemployment rate, economic growth and central bank interest rates for several of our main OECD trading partners are also included. Each publication highlights a specific topic of interest. The Monthly Economic Review is produced eleven times per year.

Latest data and events

International dairy prices continue to fall, with the latest Fonterra Global Dairy Trade auction results reporting a further 1.1 percent fall in prices (on a trade weighted index basis). Dairy prices are now 50 percent lower than their peak in early February. Fonterra has stated that in order to keep their forecast payout at $5.30 per kilogram of milk solids, the average price for whole milk powder needs to recover to around US$3,500 per tonne by next March. In the latest auction, the average whole milk powder price was US$2,229 per tonne.

Annual net immigration continues to rise, reaching 47,684 in the year ended October 2014, an increase of 30,194 from a year earlier. Approximately half of the increase was due to a reduction in the number of permanent and long-term departures, and the other half was due to an increase in the number of permanent and long-term arrivals. The net number of people leaving to live in Australia fell by 18,182 during the year to 5,311, predominantly due to a reduction in the number of permanent and long term departures to Australia.

Oil prices have fallen over recent months, resulting in lower petrol prices. The Brent Oil price at the time of writing was US$69.26 per barrel, down from US$115 per barrel in June. Despite the fall in oil prices, the Organization of the Petroleum Exporting Countries (OPEC) decided in November to keep production at current levels. The price of 91-unleaded petrol in New Zealand was $2.03 per litre in early December, compared with $2.12 in the September quarter.

All 14 regions recorded a rise in economic activity in the September quarter according to the ANZ Regional Trends publication. Growth in the Otago region expanded by 2.2 percent in the quarter, while at the other end of the spectrum, economic activity in the Bay of Plenty region expanded by 0.4 percent in the quarter.

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