Formats and related files
Weekly Economic Update 19 March 2021#
Regional Activity Indicators released#
The Regional Activity Indices (RAIs) were updated this week for the February month. Each RAI is a composite index that summarises six monthly indicators of economic activity in that region. Activity growth in the northernmost regions of the North Island (Northland, Auckland and Waikato) fell marginally in February as a result of the temporary escalations of alert levels in Auckland. This was reflected by falls in consumer card spending, light traffic, and electricity grid demand (Figure 1).
Figure 1: Auckland Activity Index

Sources: The Treasury/Various
For the rest of New Zealand, activity remained little-changed from January. Activity growth in lower South Island regions remains below average, although a number of these regions did display a modest uptick in February (Canterbury, West Coast, Otago and Southland).
Dairy prices retreat from recent highs#
The GlobalDairyTrade (GDT) auction price index GDT result from Tuesday night ended a run of 8 consecutive increases, falling 3.8% following a 15.0% rise in the prior auction (Figure 2). While whole milk powder prices dipped 6.2% (following the 21.0% increase at the last auction), they remain at levels not seen since 2014. Butter prices also retreated somewhat (down 2.8%) but remain at 3-year highs. These elevated price levels support a continued positive outlook for farmgate milk prices for the 2020/21 season.
Figure 2: GlobalDairyTrade auction prices

Sources: GlobalDairyTrade/Haver
Current account deficit widens…#
New Zealand’s seasonally adjusted quarterly current account deficit widened by $1.6 billion in the December 2020 quarter, to reach $2.1 billion. The increase in the deficit was driven by deteriorations in both the goods and services balances, as goods imports recovered further and services exports fell.
Figure 3: Current account deficit (annual)

Source: Stats NZ
…and GDP was weaker than expected#
December quarter GDP was weaker than expected, falling 1.0% (following a record increase of 13.9% in the September quarter). This quarter’s result was driven by a decline in activity in construction services and non-residential building as well as a 5.0% fall in the tourism-impacted retail, accommodation and restaurants industries. On an annual basis, GDP for the year ended December 2020 fell 2.9%.
Mixed data in the US…#
Retail sales and industrial production in the United States declined by 3.3% and 2.2%, respectively, in February compared to the previous month, partly due to severe weather conditions impacting central states (Figure 4). The decline should therefore be reversed in March, supported by the recently disbursed US$1,400 stimulus cheques to households. The January surge in retail sales was revised up by 2.3 percentage points to 7.6%. However, there are concerns that global supply chain issues will delay the ability of manufacturing production to catch up with goods demand.
Figure 4: Industrial production and retail sales

Source: Haver
…and China…#
Retail sales in China declined by an average 0.4% in January and February compared to December, when growth was 1.3%. This reflects travel restrictions that were put in place during the Lunar New Year period to combat an outbreak of COVID-19 in the community. Monthly growth in industrial production held steady at 0.7%, supported by stronger external demand and an increase in hours worked. Investment spending grew by 2.5% on a monthly basis, the strongest growth since August last year, driven by a further increase in property investment.
…as US Fed raises growth forecasts#
At its Federal Open Market Committee (FOMC) meeting, the US Federal Reserve (Fed) left its policy settings unchanged and upgraded its forecasts for economic activity. Real GDP is forecast to expand by 6.5% in 2021, up from 4.2% in the December projections, while the unemployment rate forecast was downgraded from 5.0% to 4.5%. Higher economic growth is expected to have only a transitory effect on inflation, rising to 2.4% by the end of 2021 before falling to just above 2.0% in 2022-23. While most FOMC participants still see the policy interest rate on hold until the end of 2023, four expect tightening to commence in 2022 (up from one in December), and seven expect an increase in 2023 (up from five).
Australian unemployment declines further#
The unemployment rate declined from 6.3% in January to 5.8% in February, while the participation rate remained steady at 66.1% (Figure 5). Monthly hours worked increased by 6.2% following the sharp fall in January, while the underemployment rate increased from 8.1% to 8.5%, compared to a pre-pandemic rate of 8.2%.
Figure 5: Australia labour market

Source: Haver
Vaccine concerns in Europe#
A number of European countries suspended the AstraZeneca vaccine rollout this week owing to concerns about possible serious side effects. After the European Medicines Agency deemed it "safe and effective", Germany, France, Spain, and Italy will recommence its use. The pausing of the vaccine rollout has added to existing concerns about Europe’s progress lagging other developed markets owing to supply shortages. COVID-19 infection rates have been rising recently in Italy and Germany, with the former going into another lockdown from 15 March to 6 April.
Date | Key upcoming NZ data | Previous |
---|---|---|
24 Mar | Overseas Merchandise Trade | $626 million (deficit) |
High-Frequency Indicators (Domestic)#
Traffic Movement#

Source: Waka Kotahi NZ Transport Agency
Freight Movement#

Source: Waka Kotahi NZ Transport Agency
Spending by Region#

Source: Marketview data via MBIE
Spending by Industry#

Source: Marketview data via MBIE
Jobseeker (JS) and Income Support Recipients#

Source: MSD
People Movements at Selected Locations#

Source: Google
High-Frequency Indicators (Global)#
Trade Weighted Index#

Source: RBNZ
Volatility Index#

Source: Haver
US Activity and Equities#

Sources: Federal Reserve Bank of New York, Haver
Labour Markets#

Source: Haver
COVID-19 Cases#

Sources: World Health Organisation/Haver
World Commodity Prices#

Source: ASB
Regional Activity Charts, part 1#
Northland#

Auckland#

Waikato#

Bay of Plenty#

Note
- All component indicators (displayed in light grey) have been standardised in the same way as the RAI itself (ie, to have mean = 0 and standard deviation = 1). This allows for all the series to be presented on the same scale – making the co-movements of interest more readily apparent. These standardised inputs can be viewed and downloaded alongside the RAIs on the Stats NZ COVID-19 data portal.
Regional Activity Charts, part 2#
Gisborne#

Hawke's Bay#

Taranaki#

Manawatū-Whanganui#

Wellington#

Note
- All component indicators (displayed in light grey) have been standardised in the same way as the RAI itself (ie, to have mean = 0 and standard deviation = 1). This allows for all the series to be presented on the same scale – making the co-movements of interest more readily apparent. These standardised inputs can be viewed and downloaded alongside the RAIs on the Stats NZ COVID-19 data portal.
Regional Activity Charts, part 3#
Tasman/Nelson/Marlborough#

Canterbury#

West Coast#

Otago#

Southland#

Note
- All component indicators (displayed in light grey) have been standardised in the same way as the RAI itself (ie, to have mean = 0 and standard deviation = 1). This allows for all the series to be presented on the same scale – making the co-movements of interest more readily apparent. These standardised inputs can be viewed and downloaded alongside the RAIs on the Stats NZ COVID-19 data portal.
Tables#
Quarterly Indicators | 2019Q3 | 2019Q4 | 2020Q1 | 2020Q2 | 2020Q3 | 2020Q4 | |
---|---|---|---|---|---|---|---|
Real Production GDP1 | qpc | 0.7 | 0.1 | -1.2 | -11.0 | 13.9 | -1.0 |
aapc | 2.8 | 2.4 | 1.7 | -1.7 | -2.3 | -2.9 | |
Current account balance (annual) | %GDP | -3.7 | -3.3 | -2.8 | -1.8 | -0.8 | -0.8 |
Merchandise terms of trade | apc | 0.9 | 7.1 | 5.4 | 6.3 | -0.3 | -1.7 |
CPI inflation | qpc | 0.7 | 0.5 | 0.8 | -0.5 | 0.7 | 0.5 |
apc | 1.5 | 1.9 | 2.5 | 1.5 | 1.4 | 1.4 | |
Employment (HLFS)1 | qpc | 0.6 | 0.4 | 1.0 | -0.3 | -0.7 | 0.6 |
Unemployment rate1 | % | 4.2 | 4.1 | 4.2 | 4.0 | 5.3 | 4.9 |
Participation rate1 | % | 70.7 | 70.4 | 70.7 | 69.9 | 70.1 | 70.2 |
LCI salary & wage rates - total2 | apc | 2.5 | 2.6 | 2.5 | 2.1 | 1.8 | 1.6 |
QES average hourly earnings - total2 | apc | 4.2 | 3.6 | 3.6 | 3.0 | 3.6 | 4.2 |
Core retail sales volume | apc | 5.4 | 3.3 | 4.0 | -11.7 | 7.7 | 4.2 |
Total retail sales volume | apc | 4.5 | 3.3 | 2.3 | -14.2 | 8.3 | 4.8 |
WMM - consumer confidence3 | Index | 103.1 | 109.9 | 104.2 | 97.2 | 95.1 | 106.0 |
QSBO - general business situation1,4 | net% | -37.1 | -30.8 | -67.9 | -57.6 | -37.6 | -16.3 |
QSBO - own activity outlook1,4 | net% | -0.6 | 2.9 | -12.9 | -24.1 | 0.5 | 9.4 |
Monthly Indicators | Sep 20 | Oct 20 | Nov 20 | Dec 20 | Jan 21 | Feb 21 | |
---|---|---|---|---|---|---|---|
Merchandise trade balance (12 month total) | NZ$m | 1,655 | 2,223 | 3,286 | 2,975 | 2,745 | ... |
Dwelling consents - residential | apc | 7.7 | 7.2 | 19.9 | 26.9 | 18.0 | ... |
House sales - dwellings | apc | 41.9 | 30.0 | 34.0 | 46.3 | 6.2 | 14.6 |
REINZ - house price index | apc | 10.8 | 13.2 | 16.0 | 17.8 | 18.9 | 21.4 |
Estimated net migration (12 month total) | people | 69,341 | 60,060 | 52,019 | 44,127 | ... | ... |
ANZ NZ commodity price index | apc | -6.5 | -5.6 | -10.9 | -5.9 | -1.6 | 0.1 |
ANZ world commodity price index | apc | -3.1 | -2.3 | -5.5 | -0.4 | 5.2 | 11.1 |
ANZBO - business confidence | net% | -28.5 | -15.7 | -6.9 | 9.4 | ... | 7.0 |
ANZBO - activity outlook | net% | -5.4 | 4.7 | 9.1 | 21.7 | ... | 21.3 |
ANZ-Roy Morgan - consumer confidence | net% | 100.0 | 108.7 | 106.9 | 112.0 | 113.8 | 113.1 |
Weekly Benefit Numbers | 5 Feb | 12 Feb | 19 Feb | 26 Feb | 5 Mar | 12 Mar | |
---|---|---|---|---|---|---|---|
Jobseeker Support | number | 211,806 | 211,026 | 210,573 | 208,335 | 206,541 | 205,446 |
Work Ready | number | 133,743 | 132,858 | 132,234 | 130,113 | 128,415 | 127,272 |
Health Condition and Disability | number | 78,066 | 78,171 | 78,339 | 78,219 | 78,126 | 78,174 |
COVID-19 Income Relief Payment | number | 0 | ... | ... | ... | ... | ... |
Full-time | number | 0 | ... | ... | ... | ... | ... |
Part-time | number | 0 | ... | ... | ... | ... | ... |
Daily Indicators | Wed 10/03/21 |
Thu 11/03/21 |
Fri 12/03/21 |
Mon 15/03/20 |
Tue 16/03/21 |
Wed 17/03/21 |
|
---|---|---|---|---|---|---|---|
NZ exchange and interest rates5 | |||||||
NZD/USD | $ | 0.7167 | 0.7193 | 0.7228 | 0.7197 | 0.7199 | 0.7186 |
NZD/AUD | $ | 0.9303 | 0.9309 | 0.9274 | 0.9269 | 0.9296 | 0.9291 |
Trade weighted index (TWI) | index | 75.2 | 75.4 | 75.4 | 75.3 | 75.4 | 75.3 |
Official cash rate (OCR) | % | 0.25 | 0.25 | 0.25 | 0.25 | 0.25 | 0.25 |
90 day bank bill rate | % | 0.33 | 0.32 | 0.32 | 0.32 | 0.33 | 0.33 |
10 year govt bond rate | % | 1.82 | 1.77 | 1.69 | 1.79 | 1.80 | 1.73 |
Share markets6 | |||||||
Dow Jones | index | 32,297 | 32,486 | 32,779 | 32,953 | 32,826 | 33,015 |
S&P 500 | index | 3,899 | 3,939 | 3,943 | 3,969 | 3,963 | 3,974 |
VIX volatility index | index | 22.6 | 21.9 | 20.7 | 20.0 | 19.8 | 19.2 |
AU all ords | index | 6,947 | 6,953 | 7,015 | 7,019 | 7,079 | 7,048 |
NZX 50 | index | 12,252 | 12,272 | 12,427 | 12,592 | 12,689 | 12,622 |
US interest rates | |||||||
3 month OIS | % | 0.07 | 0.07 | 0.07 | 0.07 | 0.07 | ... |
3 month Libor | % | 0.18 | 0.18 | 0.19 | 0.18 | 0.19 | ... |
10 year govt bond rate | % | 1.53 | 1.54 | 1.64 | 1.62 | 1.62 | 1.63 |
Commodity prices6 | |||||||
WTI oil | US$/barrel | 64.44 | 66.02 | 65.59 | 65.36 | 64.82 | ... |
Gold | US$/ounce | 1,716 | 1,724.25 | 1,704.80 | 1,723.65 | 1,735.00 | ... |
CRB Futures | index | 495 | 498.79 | 496.46 | 495.48 | 496.62 | ... |
Data in Italic font are provisional.
... Not available.
(1) Seasonally adjusted
(2) Ordinary time, all sectors
(3) Westpac McDermott Miller
(4) Quarterly Survey of Business Opinion
(5) Reserve Bank (11am)
(6) Daily close
Country | Indicator | Aug 20 | Sep 20 | 2020Q3 | Oct 20 | Nov 20 | Dec 20 | 2020Q4 | Jan 21 | Feb 21 | Mar 21 | |
---|---|---|---|---|---|---|---|---|---|---|---|---|
United States [9.6% share of total goods exports] |
GDP1 | qpc | 7.5 | 1.0 | ||||||||
Industrial production1 | mpc | 1.0 | -0.1 | 1.0 | 0.9 | 1.0 | 1.1 | -2.2 | ... | |||
CPI | apc | 1.3 | 1.4 | 1.2 | 1.2 | 1.4 | 1.4 | 1.7 | ... | |||
Unemployment rate1 | % | 8.4 | 7.8 | 6.9 | 6.7 | 6.7 | 6.3 | 6.2 | ... | |||
Employment change1 | 000s | 1583.0 | 716.0 | 680.0 | 264.0 | -306.0 | 166.0 | 379.0 | ... | |||
Retail sales value | apc | 3.6 | 6.1 | 5.4 | 3.8 | 2.3 | 9.5 | 6.3 | ... | |||
House prices2 | apc | 5.4 | 6.7 | 8.1 | 9.2 | 10.1 | ... | ... | ... | |||
PMI manufacturing1 | index | 55.6 | 55.7 | 58.8 | 57.7 | 60.5 | 58.7 | 60.8 | ... | |||
Consumer confidence1,3 | index | 86.3 | 101.3 | 101.4 | 92.9 | 87.1 | 88.9 | 91.3 | ... | |||
Japan [6.1%] |
GDP1 | qpc | 5.3 | 2.8 | ||||||||
Industrial production1 | mpc | 1.0 | 3.9 | 4.0 | -0.5 | -1.0 | 4.3 | ... | ... | |||
CPI | apc | 0.1 | 0.0 | -0.4 | -0.9 | -1.1 | -0.6 | ... | ... | |||
Unemployment rate1 | % | 3.0 | 3.0 | 3.1 | 3.0 | 3.0 | 2.9 | ... | ... | |||
Retail sales value | apc | -1.9 | -8.7 | 6.4 | 0.6 | 5.0 | 2.7 | ... | ... | |||
PMI manufacturing1 | index | 47.2 | 47.7 | 48.7 | 49.0 | 50.0 | 49.8 | 51.4 | ... | |||
Consumer confidence1,4 | index | 29.3 | 32.8 | 33.3 | 33.6 | 31.8 | 30.0 | 33.7 | ... | |||
Euro area [5.5%] |
GDP1 | qpc | 12.5 | -0.7 | ||||||||
Industrial production1 | mpc | 0.9 | 0.1 | 2.5 | 2.2 | -0.1 | 0.8 | ... | ... | |||
CPI | apc | -0.2 | -0.3 | -0.3 | -0.3 | -0.3 | 0.9 | 0.9 | ... | |||
Unemployment rate1 | % | 8.7 | 8.6 | 8.4 | 8.1 | 8.1 | 8.1 | ... | ... | |||
Retail sales volume | apc | 4.5 | 2.5 | 4.4 | -1.9 | 0.9 | -6.4 | ... | ... | |||
PMI manufacturing1 | index | 51.7 | 53.7 | 54.8 | 53.8 | 55.2 | 54.8 | 57.9 | ... | |||
Consumer confidence5 | index | -14.6 | -13.6 | -15.5 | -17.6 | -13.8 | -15.5 | -14.8 | ... | |||
United Kingdom [2.7%] |
GDP1 | qpc | 16.1 | 1.0 | ||||||||
Industrial production1 | mpc | 0.5 | 0.7 | 0.9 | 0.3 | 0.2 | -1.5 | ... | ... | |||
CPI | apc | 0.2 | 0.6 | 0.7 | 0.4 | ... | ... | ... | ... | |||
Unemployment rate1 | % | 4.5 | 4.8 | 4.9 | 5.0 | 5.1 | ... | ... | ... | |||
Retail sales volume | apc | 2.7 | 4.5 | 6.0 | 2.3 | 3.1 | -5.9 | ... | ... | |||
House prices6 | apc | 3.7 | 5.0 | 5.8 | 6.5 | 7.3 | 6.4 | 6.9 | ... | |||
PMI manufacturing1 | index | 55.2 | 54.1 | 53.7 | 55.6 | 57.5 | 54.1 | 55.1 | ... | |||
Consumer confidence1,5 | index | -27.0 | -25.0 | -31.0 | -33.0 | -26.0 | -28.0 | -23.0 | ... | |||
Australia [15.8%] |
GDP1 | qpc | 3.4 | 3.1 | ||||||||
CPI | apc | 0.7 | 0.9 | |||||||||
Unemployment rate1 | % | 6.8 | 6.9 | 7.0 | 6.8 | 6.6 | 6.3 | 5.8 | ... | |||
Retail sales value | apc | 5.4 | 6.6 | 7.7 | 12.1 | 10.3 | 10.3 | ... | ... | |||
House Prices7 | apc | 5.0 | 4.3 | |||||||||
PMI manufacturing1 | index | 49.3 | 46.7 | 56.3 | 52.1 | 55.3 | 55.3 | 58.8 | ... | |||
Consumer confidence8 | index | 79.5 | 93.8 | 105.0 | 107.7 | 112.0 | 107.0 | 109.1 | 111.8 | |||
China [24.3%] |
GDP | apc | 4.9 | 6.5 | ||||||||
Industrial production | apc | 5.6 | 6.9 | 6.9 | 7.0 | 7.3 | 35.1 | 35.1 | ... | |||
CPI | apc | 2.4 | 1.7 | 0.5 | -0.5 | 0.2 | -0.3 | -0.2 | ... | |||
PMI manufacturing1 | index | 51.0 | 51.5 | 51.4 | 52.1 | 51.9 | 51.3 | 50.6 | ... | |||
South Korea [3.0%] |
GDP1 | qpc | 2.1 | 1.2 | ||||||||
Industrial production1 | mpc | 0.7 | 3.1 | -0.5 | 0.5 | 2.7 | -1.6 | ... | ... | |||
CPI | apc | 0.7 | 1.0 | 0.1 | 0.6 | 0.5 | 0.6 | 1.1 | ... |
(1) Seasonally adjusted
(2) Case-Shiller Home Price Index 20 city
(3) The Conference Board Consumer Confidence Index
(4) Cabinet Office Japan
(5) European Commission
(6) Nationwide House Price Index
(7) Australian Bureau of Statistics
(8) Melbourne/Westpac Consumer Sentiment Index