Weekly Economic Update 30 April 2021
High risk countries identified…
The two-week suspension of all flights into New Zealand from India ended on Wednesday. Brazil, Pakistan and Papua New Guinea have now joined India as being designated "very high risk countries", with only New Zealand citizens and their immediate families eligible for entry into New Zealand. Australia has also announced that it will suspend all direct flights from India until 15 May.
…and quarantine free travel from Western Australia resumes…
New Zealand resumed quarantine-free travel with Western Australia from midday Wednesday, following a three-day lockdown following a breach at a hotel quarantine site in Western Australia.
…with increases in arrivals and departures
As expected, the travel bubble has resulted in an increase in both arrivals and departures, with daily arrivals averaging around 3,000 people per day in the past week (Figure 1), compared to around 400 people per day over the six months prior. Departures have averaged around 2,300 people per day over the past week compared to around 500 per day over the six months prior.
Figure 1: Average daily border crossings
Source: NZ Customs Service
Monthly trade deficit widens
The seasonally adjusted monthly trade deficit widened as import values increased by more than export values, resulting in a March quarter deficit of $1.1 billion. The annual trade surplus continued to decline from November's record high, falling to $1.7 billion (Figure 2).
Figure 2: Overseas merchandise trade
Source: Stats NZ
On a seasonally adjusted monthly basis, goods exports rose for the second month, though values for the March quarter as a whole were down compared to the previous quarter. Fruit and dairy products rose strongly in the month, while log exports recovered from a dip in February and meat exports were flat. Seasonally adjusted monthly goods imports rose sharply to reach the highest level ever in a March month. For the March quarter, both consumption and capital goods imports were up around 10% compared to 2020.
Business confidence bounces back in April
The final April read of the ANZ Business Outlook Survey showed that business confidence rose 6 points in April from the preliminary read, to a net -2%, and own activity lifted 6 points to 22%.
According to ANZ, improved sentiment was likely influenced by the announcement of the trans-Tasman bubble.
Cost and pricing intentions remain elevated. Cost expectations rose 3 points to a net 76.1% of respondents reporting higher costs, and a net 55.8% are intending to raise prices.
Activity indicators in the construction sector have fallen significantly. Residential construction intentions fell 13 points and commercial construction intentions were down 17 points. Freight disruptions remain especially problematic and have worsened for construction and retail.
The global recovery gathers pace…
Purchasing Managers Index (PMI) readings indicate an ongoing global recovery in April, though some divergence between countries is apparent. In the US, UK and Australia, composite output indices rose to around 60 in April, indicating strong economic expansion (Figure 3). Fiscal stimulus and vaccination progress are helping to drive the recoveries in the US and UK, while the continued elimination of COVID-19 in Australia is supporting the recovery there. Services indices in the US and UK are both at record levels, reflecting the transition from goods to services demand as public gathering restrictions ease.
Figure 3: Composite output PMI
PMI readings in Japan and the euro area were more subdued, showing little growth compared to March (Figure 3). Japan issued a two-week state of emergency on 25 April amid rising COVID-19 cases, while many European countries enforced tight restrictions in April.
…led by the United States…
Data from the US continue to show an accelerating recovery, with the consumer confidence index jumping 13 points in April (Figure 4). The increase was driven by a 30-point rise in the present situation index, reflecting the boost from stimulus payments and the improving labour market. Meanwhile, annual house price growth in the US reached its highest level since 2006, March trade data reflected strong domestic demand, and President Biden announced further fiscal stimulus with his $1.8 trillion American Families Plan.
Figure 4: US consumer confidence
…as Australian inflation remains subdued…
Australian consumer prices rose 0.6% in the March quarter, bringing annual CPI inflation to 1.1%. Inflation was weaker than expected, and was mainly driven by higher fuel costs compared with the low prices in the March 2020 quarter. The result suggests relatively weak domestic price pressures as the Australian economy continues to recover.
…and central banks maintain support…
The US Federal Reserve held policy settings unchanged this week, stating that their inflation and employment goals are a long way from being achieved while acknowledging the stronger economic outlook. Supportive policy settings were also maintained by central banks for the euro area, Sweden and Japan, while the Bank of Russia increased its policy rate amid rising inflation.
…amid a growing resurgence in virus cases
Global COVID-19 cases have trended upwards since February, with the daily average new cases reaching a record high this week of 820,000. Daily deaths have also trended upwards to around 13,000 per day but have not yet reached the January peak of 14,000. India is seeing the most severe resurgence, with daily new cases reaching above 300,000. Meanwhile, nearly one third of the US population has been fully vaccinated, and new guidance from the Centers for Disease Control and Prevention says that inoculated people can socialise outdoors without wearing a mask.
|Date||Key upcoming NZ Data||Previous|
|5 May||Unemployment rate||4.9%|
|6 May||Building consents issued||-18.2% (mpc)|
|6 May||ANZ Business Confidence||-2.0 (net %)|
High-Frequency Indicators (Domestic)
Source: Waka Kotahi NZ Transport Agency
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
People Movements at Selected Locations
High-Frequency Indicators (Global)
Trade Weighted Index
US Activity and Equities
Sources: Federal Reserve Bank of New York, Haver
Sources: World Health Organisation/Haver
World Commodity Prices
|Real Production GDP1||qpc||0.1||-1.2||-11.0||13.9||-1.0||...|
|Current account balance (annual)||%GDP||-3.3||-2.8||-1.8||-0.8||-0.8||...|
|Merchandise terms of trade||apc||7.1||5.4||6.3||-0.3||-1.7||...|
|LCI salary & wage rates - total2||apc||2.6||2.5||2.1||1.8||1.6||...|
|QES average hourly earnings - total2||apc||3.6||3.6||3.0||3.6||4.2||...|
|Core retail sales volume||apc||3.3||4.0||-11.7||7.7||4.2||...|
|Total retail sales volume||apc||3.3||2.3||-14.2||8.3||4.8||...|
|WMM - consumer confidence3||Index||109.9||104.2||97.2||95.1||106.0||105.2|
|QSBO - general business situation1,4||net%||-30.4||-68.4||-57.4||-37.7||-15.7||-10.7|
|QSBO - own activity outlook1,4||net%||2.5||-12.2||-23.5||-0.5||9.1||7.8|
|Monthly Indicators||Nov 20||Dec 20||Jan 21||Feb 21||Mar 21||Apr 21|
|Merchandise trade balance (12 month total)||NZ$m||3,287||2,982||2,731||2,382||1,688||...|
|Dwelling consents - residential||apc||19.9||26.9||18.0||-4.7||...||...|
|House sales - dwellings||apc||34.0||46.3||6.9||19.0||31.2||...|
|REINZ - house price index||apc||16.0||17.8||18.9||21.4||24.0||...|
|Estimated net migration (12 month total)||people||50,464||42,211||31,628||17,428||...||...|
|ANZ NZ commodity price index||apc||-10.9||-5.9||-1.6||0.1||4.0||...|
|ANZ world commodity price index||apc||-5.5||-0.4||5.2||11.0||20.2||...|
|ANZBO - business confidence||net%||-6.9||9.4||...||7.0||-4.1||-2.0|
|ANZBO - activity outlook||net%||9.1||21.7||...||21.3||16.6||22.2|
|ANZ-Roy Morgan - consumer confidence||net%||106.9||112.0||113.8||113.1||110.8||...|
|Weekly Benefit Numbers||19 Mar||26 Mar||2 Apr||9 Apr||16 Apr||23 Apr|
|Health Condition and Disability||number||78,243||78,558||78,309||77,988||78,042||77,931|
|COVID-19 Income Relief Payment||number||...||...||...||...||...||...|
|NZ exchange and interest rates5|
|Trade weighted index (TWI)||index||75.0||75.3||75.0||...||75.3||75.2|
|Official cash rate (OCR)||%||0.25||0.25||0.25||0.25||0.25||0.25|
|90 day bank bill rate||%||0.34||0.35||0.35||...||0.35||0.35|
|10 year govt bond rate||%||1.61||1.58||1.56||...||1.60||1.63|
|VIX volatility index||index||17.5||18.7||17.3||17.6||17.6||17.3|
|AU all ords||index||7,259||7,312||7,321||7,308||7,296||7,320|
|US interest rates|
|3 month OIS||%||0.07||0.07||0.07||0.07||0.07||...|
|3 month Libor||%||0.17||0.18||0.18||0.18||0.18||...|
|10 year govt bond rate||%||1.57||1.57||1.58||1.58||1.63||1.63|
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||2020Q3||Oct 20||Nov 20||Dec 20||2020Q4||Jan 21||Feb 21||Mar 21||2021Q1||Apr 21|
|Retail sales value||apc||5.6||3.8||2.3||9.4||6.5||27.9||...|
|Retail sales value||apc||6.4||0.6||5.0||2.7||3.7||5.2||...|
|Retail sales volume||apc||4.5||-1.6||1.2||-5.2||-2.9||...||...|
|Retail sales volume||apc||6.1||2.2||3.1||-5.9||-3.6||7.1||...|
|Retail sales value||apc||7.7||12.1||10.3||10.3||5.2||...||...|
(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