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Terms of Trade record growth

New Zealand’s terms of trade rose 0.7 per cent in the September quarter to reach an all-time new record, Stats NZ said today.

Terms of trade is a measure of purchasing power of New Zealand’s exports abroad and an indicator of the state of the overall economy. It provides a more detailed reading of the flow of goods and services across the border.

The rise of 0.7 per cent this quarter was due to import prices falling more than export prices. 

Diagram for the September 2017 quarter.

Import movements in the motor vehicle industry contributed to the fall in import prices, with a 3.2 per cent decrease compared to the previous quarter ending in June 2017.

The drop in petroleum and petroleum product prices, which aren’t seasonally adjusted, had a significant effect on the overall decrease in imports. Prices fell 11.9 percent, with volumes down 5.6 percent and values down 17 percent.

The main reason, however, is due the increased price of meat and dairy exports.

“The terms of trade increased over the last year, driven by high meat and dairy prices, especially butter, to reach the highest level since the series began in March 1957,” international statistics senior manager Daria Kwon said.

“The previous high for the terms of trade was the June 1973 quarter.”

The services terms of trade rose 3.6 per cent in the September 2017 quarter. Services export prices rose 0.9 per cent, led by 3.2 per cent gain for transportation, while import prices for services imports fell by 2.6 per cent.

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Retail spending quiet

Retail spending was quiet in the September quarter

New figures reveal a decrease in retail spending in the September 2017 quarter.

Retailers saw quieter spending in the September 2017 quarter from the buoyant June period, which was boosted by increases from the hospitality industries, Statistics NZ said.

“There were strong increases from the food and beverage services and accommodation industries in June, on the back of the World Masters Games and the Lions tour,” retail trade manager Sue Chapman said.

“However, the reverse has occurred this quarter, with both of these industries falling.”

According to Statistics NZ, after being adjusted for price and seasonal effects, total retail sales volumes rose 0.1 percent ($30 million) in the September 2017 quarter. The last time retail sales growth was around this level was in the June 2015 quarter, when values rose 0.2 percent ($36 million).

In comparison to the last recorded quarter in June, 8 of the 15 industries had higher sales values with supermarket and grocery sales recording the largest movement, up 1.6 percent ($78 million). The largest decrease was in fuel retailing, down 3.2 percent ($64 million).

Spending on motor vehicles and parts, excluding fuel, remained the same since the June quarter, but was up 9.5 per cent from the same September quarter in 2016.  

In actual terms, the value of total retail sales was $21.9 billion in the September 2017 quarter, up 5.4 percent ($1.1 billion) from the September 2016 quarter.


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New light commercial imports shine

 With a total of 29,960 passenger and light commercial vehicle imports for the month of October, the pipeline continues to be strong across all sectors.

Imports of used cars increased by 20.7 per cent compared with the same month last year with 14,866 cars crossing the border last month.

Used light commercial vehicles were down by 5.4 per cent, with 712 units entering NZ, the only glitch in an otherwise strong month for imports. 

New cars were up slightly with 10,473 imports, up 3.5 per cent on the 10,115 that entered in October 2016.

The stand out though were the 3,909 new light commercial vehicles that came in, this was the best month of 2017 and year to date, there have been more vehicles in this segment imported than the whole of 2016. For the full year 2016 there were 29,852 new light commercial’s imported and year to date 2017 this figure sits at 31,259 and is shaping up to be a bumper year for this category.

Year to date, 143,866 used cars and 95,326 new cars have entered the country up 16,832 units and 13.2 per cent for used, and 5,270 units and 5.2 per cent for new passenger vehicles.

In the used car market Japan increased 24.2 per cent on the same month last year, increasing their monthly market share to 94.68 per cent, last month 11,256 were sourced from that country.

Australia, Singapore and the UK were all down on October 2016 with 24.4, 16.5 and 14.1 per cent drops respectively.

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Used commercials close to 2016 total sales

Used commercial vehicles continued to be in demand in October with 1,130 registrations, a 16.2 per cent increase on the same month last year, when 974 units were sold.

Year-to-date a total of 10,823 use commercial vehicles have been registered, up a healthy 23.3 per cent on the same period last year and only 144 short of the total sold for the whole of 2016.

Many regions around the country saw large gains in used imported commercial vehicle registrations last month. Napier was the major standout, more than doubling its total from 10 units in October 2016 to 24 last month, an increase of 140 per cent. Nelson jumped 107 per cent from 14 to 29 units, and Rotorua gained 91.7 per cent with 23 units sold last month compared to 12 last October.

In terms of brands, Toyota remained top with a massive 46.5 per cent of the total market year to date with 5,038 registrations, 3,782 of these were for sales of Hiace vans.

For the month of October Toyota had a market share of 43.1 per cent with Nissan second on 23.5 per cent an rounding out the top three in distant third was Mazda, on 8.7 per cent.

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Confidence returns to used car market

Confidence has returned to the used car market after September’s pre-election slow down.

There were 14,118 registrations of used imported passenger vehicles in October – up 11.1 per cent compared to the same month last year and an increase of 473 sales on September’s total of 13,645.

During the past 12 months, sales of used cars have totaled 162,571 – up 9.9 per cent on the previous 12 months.

Toyota continues to top the sales’ table with 3,509 sales for the month – up 5.6 per cent from the same time last year. Nissan was the second marque with 2,762 registrations – up 17.3 per cent on October 2016, and Mazda rounded out the top three on 2,296 units – up 18.2 per cent.

Year to date, Toyota has sold 34,290 units for a market share of 25.1 per cent, Nissan on 25,387 and 18.6 per cent and Mazda with 20,903 units and 15.3 per cent of market share.

The battle for top model continues to be close with the Mazda Axela, Nissan Tiida and Suzuki Swift making up the top three respectively. There were 657 Axela sold – 21.7 per cent on the same month last year, 613 Tiida – a fall of 9.5 per cent, and 579 Swift – up 21.6 per cent on October 2016.

The three cars hold 4.5 per cent, 4.3 per cent and 4.2 per cent of the year-to-date market share.

When looking at the individual regions, sales for October increased almost throughout New Zealand.

Registrations of used cars increased by a massive 91.1 per cent in Gisborne, with 86 units compared to 45 during October last year. Rotorua dealerships also had a great month with sales up 53.4 per cent on 204 registrations compared to 133 and Wanganui was close behind up 49.4 per cent on 115 units for October.

Invercargill was the top sales region in the South Island with sales up 34 per cent on 205 units compared to 153 in October 2016.

Auckland sales were up a modest 4.5 per cent with 6,618 sales in October compared to 6,335 in the same month last year.

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Annual inflation up to 1.9%

The consumers price index (CPI) had an annual increase of 1.9 per cent, and rose 0.5 per cent from the June 2017 quarter, Stats NZ said today.

This comes after 0.0 per cent quarterly, and 1.7 per cent annual, inflation last quarter. Collectively, housing-related costs had the largest upward contribution in the September 2017 quarter, slightly offset by falls in transport prices.

However, prices for second-hand motor cars fell 0.9 per cent this quarter but increased 1.8 per cent in the year. Petrol prices fell 1.7 per cent in the September 2017 quarter and increased 4.5 per cent in the year. Vehicle relicensing fees fell 8.0 per cent this quarter and 8.0 per cent in the year.

“In the latest quarter petrol prices fell three cents, to an average of $1.83 a litre, despite rising through August and September,” prices senior manager Jason Attewell says. “Average petrol prices in the CPI differ from what you see at the petrol station, because they take into account supermarket and loyalty card discounts.”

Housing was behind the increase in inflation. Rents rose 0.6 per cent in the September 2017 quarter and 2.2 per cent in the year. Construction of new dwellings (excluding land) rose 1.1 per cent this quarter and 5.4 per cent in the year to September. Local authority rates rose 3.5 per cent this quarter and 3.7 per cent in the year. While dwelling insurance rose 6.1 per cent this quarter and 12 per cent in the year.

Regionally, rents in Canterbury had a 1.9 per cent decrease in the latest year; this is the fifth consecutive annual decrease in rents for the region. The annual increase of 2.6 per cent in construction of new dwellings (excluding land) is the lowest annual increase since September 2010, before the Canterbury earthquakes.

Auckland had the lowest annual increases in rent and construction costs since March 2015. In Wellington, construction costs rose 1.4 per cent the September 2017 quarter (3.2 per cent annually), and rents rose 1.0 per cent (3.7 per cent annual). This was the largest annual increase in Wellington rents since December 2008.
“Rents and construction costs in Wellington are rising faster than for the rest of the country,” Attewell says. “Annual rents rose by more in Wellington than Auckland, while Christchurch rents fell.”

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Imports a mixed bag in September

Last month’s imports of used cars and light commercials were up compared to the same month last year, with 13,401 cars and 652 light commercials crossing the border, an increase of 15.2 and 10.5 per cent respectively.

New cars and light commercials were down 26 per cent and 9.2 per cent respectively, imports numbered 7620 cars and 2558 light commercials

Year to date figures however show increases across the board. Year to date, 129,437 used cars and 79,941 new cars have entered the country up 14,714 units for used and 4913 units for new.

Japan rallied in terms of source markets increasing to 94.66 per cent market share for the month, but when compared to September last year most other markets declined. Singapore was down 42.4 per cent from 133 units in the same month 2016 to 53 last month. Last month’s entries from the UK and Australia were down 25.2 and 19 per cent respectively on September last year.

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Used commercials up 24 per cent YTD

There were 1,094 used commercial vehicles sold during September, a 13.5 per cent increase in registrations on the same month last year.

The year to date total of 9,693 sales in the category is up a healthy 24.2 per cent compared with 2016.

Toyota is again the market leader in the used commercial sales category, selling 526 units this September, up 20.9 per cent on the same month last year. Nissan follows at a distant second, selling 217 units.

Isuzu saw a noticeable increase in sales, jumping up 45.7 per cent to third equal with Mazda, in terms of total market share, to 67 units.

The Toyota Hiace remains the top model for the month of September, with a 32.4 per cent market share. Nissan Caravan sales fell again for the month of September, when compared to the same month last year, down 17.4 per cent to 76 units.

New Plymouth was the standout for the regions, over doubling its used commercial sales from 7 units in September 2016 to 19 this September. Just down the road, Palmerston North also saw a big spike in sales, nearly doubling its sales from 15 units in September last year to 28 units this September.

Dunedin also saw a healthy increase in sales of used commercials, selling 43 units in September, a 87 per cent increase on September 2016’s total of 23.

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Ford, GM defy September predictions in United States

General Motors and Ford have exceeded analysts’ expectations in the United States with increased share prices and sales for the month of September.

General Motors chief economist Mustafa Mohatarem said all the key US economic indicators point toward continued economic growth and stability, while in addition, regions devastated by the recent hurricanes will continue to recover, helping spur new and used vehicle sales.

Reuters reports that the seasonally adjusted annualized rate of U.S. car and light truck sales in September rose to 18.57 million units from 17.72 million units a year earlier, according to Autodata Corp, which tracks industry sales.

According to car makers and dealers, much of the September gains follow the devastating hurricanes that have swept the southern part of the country. Replacing cars will boost U.S. new and used auto sales through at least November, according to industry consultants.

Shares of General Motors rose, up 2.7 per cent yesterday, while those of Ford gained 1.8 per cent, after both car makers reported better than expected sales for September.


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Aussie car sales dip in September

The Australian Federal Chamber of Automotive Industries (FCAI) reports that three of the growth segments in the Australian new vehicle market continued to rise in September, despite a 2.4 per cent dip in the overall market compared with the same month last year.

The chief executive of the FCAI, Tony Weber, said that while there was a modest sales fall in September, strong activity was recorded across several key segments.

A total of 100,200 new vehicles sales were recorded in Australia last month, a fall of 2.4 per cent compared with September 2016, according to the industry’s official statistical service VFACTS.

“Any month over 100,000 total sales has to be seen as a strong outcome, proving there is continued value for the consumer in the market,” Weber said.

Source: FCAI

Market leader Toyota recorded a 1.07 per cent rise in sales during September for a dominant 17.3 per cent share overall, followed by Mazda with 10.3 per cent, Hyundai with 8.1 per cent, Mitsubishi with 7.1 per cent and Holden with 6.9 per cent.

The Ford Ranger light commercial was Australia’s top-selling vehicle for September with 4,318 sales, followed by the Toyota Hilux with 3,822, Toyota Corolla with 3,055, Mazda3 with 2,776 and Holden Commodore with 2,547.

Utes and cab-chassis 4X4 light commercial vehicles, together with small and medium SUVs were the three growth segments during September. The 4X4 light commercials were up 11 per cent, small SUVs rose 7.9 per cent and medium SUVs increased 3.3 per cent compared with September 2016.

SUV and light commercials remain the two robust areas of the market, accounting for a 58.8 per cent share of total sales year to date, up from 56 per cent in 2016.

The overall market remained 0.2 per cent ahead of last year’s record total on a year to date basis.


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New vehicle sales on a roll

David Crawford, Chief Executive Officer of the Motor Industry Association says, “the traditional slowdown in new vehicle registrations during an election period failed to materialise in September. Monthly registrations of 14,507 vehicles was the strongest month of September on record. Registrations were 10.4 per cent (11,165 units) year to date above this time in 2016 and for the month were up 4.5 per cent (623 units) on September 2016.”

Year to date, sales of passenger and SUVs were up by 6.8% and commercial vehicles by 18.6% compared to 2016.

Toyota remains the overall market leader with 24 per cent market share (3,473 units), followed by Ford with 11 per cent (1,548 units) and Holden with 10 per cent market share (1,386 units).

Toyota was also the market leader for passenger and SUV registrations with 2,320 units, for  market share of 24 per cent, Holden followed with 1,006 registrations and Mazda with a 9 per cent market with 875 sales.

The top selling passenger and SUV models for the month was the Toyota Corolla with 957 sales, of which 742 were rentals.

In the commercial sector, Toyota was again the market leader with 25 per cent of the market with 1,153 units, followed by Ford with 875 and Holden third with on 380 registrations.

The Toyota Hilux was again the bestselling commercial model with 17 per cent share selling 791 units, The Ranger was close behind with 781 units registered. Ford Ranger remains both the top commercial vehicle model and the top model overall for 2017 with 7,098 registrations compared to 6,285 for the Toyota Hilux.

“As the 2017 year progresses economic conditions of the last 18 months remain largely unchanged with low interest rates, strong net immigration, strong New Zealand currency and stable domestic economy. The combination of these factors underpins record sales of new vehicles.” said Crawford.


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