New Zealand Finance Minister Bill English took to the Internet Monday to issue a "list of reasons to be positive" about the country's economy amid a raft of positive economic data tempered with warnings.
English gave a public "briefing" on the economy via YouTube, telling viewers that the country was in generally good shape despite taking a double hit from a global recession and the series of earthquakes that have been shaking much of second city of Christchurch to rubble.
"In the last couple of years we've faced two challenges. One has been to simply get through the recession, manage the unexpected events like earthquakes, protect the most vulnerable when the economy hasn't been in good shape and the government's been in deficit," said English.
"The other challenge has been to set a platform for future growth at the same time so we have focused on longer term policies over the last couple of years which are going to lift our potential growth, such as investment in infrastructure.
"It's good to see some growing confidence about the New Zealand economy. People, I think, are carefully starting to think that the economy is picking up and there are a number of reasons to be positive," he said, introducing his nine positive points.
Top of his list was the country's terms of trade "at 40-year highs, so a unit of New Zealand exports can buy more than it's been able to buy than at any time in the last 40 years."
He also credited the country's close trade relationship with neighboring Australia and growing trade with Asia with buoying New Zealand's prospects.
"We are finding ourselves in a part of the world next to the world's fastest growing developed economy until quite recently that's Australia and all the other economies that Australia trades with and we trade with growing so fast actually that they' re doubling their incomes about every eight or nine years and willing to pay more for more of our goods."
BIG TURNAROUND
Also "very good for manufacturers" was the exchange rate with Australia close to 20-year lows.
"We've re-regulated our financial system and compared to most developed countries it's quite sound. Our banks didn't fail. We've got new rules for just about all aspects of the financial system in place," he said on the third point.
"We've now got a highly competitive tax system, a significantly lower top tax rate than Australia, just cut the company tax rate back on April 1 this year."
He admitted that the country's smaller businesses were still struggling, "but many of our larger businesses reorganized themselves two or three years ago and they are ready to invest and employ, start being more innovative, take a few risks that's another reason to be positive."
He said New Zealanders had also helped with the "very big turnaround" in attitude to savings: "Back in 2007, New Zealanders spent about 1.11 NZ dollars for every dollar they earned. This year they'll actually spend 99 NZ cents for every dollar they earn. "
He rounded off the list by claiming success in the government drive to make the public sector "more efficient," the economic stimulus of rebuilding Christchurch, and the economic boost from the Rugby World Cup, which kicks off in New Zealand in September.
"Many New Zealanders have just rolled up their sleeves and got on and done what they needed to do and we're pretty positive about being in good shape to take the opportunities in the next five or 10 years," said English.
WHOLESALE, MANUFACTURING SALES UP
The public briefing came as the government statistics agency issued quarterly figures showing the highest quarterly rise in wholesale sales for five years and a rise in manufacturing volume sales driven by heavy industry.
Seasonally adjusted total wholesale trade sales were up 2.8 percent, or 550 million NZ dollars (445.72 million U.S. dollars), in the quarter to March, said Statistics New Zealand.
It was the sixth consecutive quarterly sales increase and the first quarterly sales increase of more than 500 million NZ dollars since 2006, said a statement from Statistics New Zealand.
Meanwhile, transport equipment, machinery and equipment with a rise of 11.9 percent drove the 1.9-percent rise in seasonally- adjusted total manufacturing sales in the March quarter.
Chemical, polymer and rubber product manufacturing (up 5 percent) and wood and paper product manufacturing (up 4.1 percent) also contributed to the rise, said Statistics New Zealand.
SERVICES EXPANSION
Also Monday, the service sector continued to show improvement in expansion during May, although at a slow pace, according to the BNZ-BusinessNZ Performance of Services Index (PSI).
The PSI for May was 52.8, up only 0.2 points from April, but the highest result since September last year. (A PSI reading above 50 indicates expansion and below 50 contraction.)
The average PSI reading for 2009 was 48.8, while for 2010 it was 53.2.
Business New Zealand chief executive Phil O'Reilly said the gradual improvement was inconsistent across regions and sub- sectors.
"The recovery could best be described as lumpy, with certain regions and sub-sectors struggling to break into expansion mode. In addition, the sub-index for employment shows businesses still tentative about hiring new staff, although a pick-up in new orders/ business for May may help feed through into the other indexes over the next few months," said O'Reilly.
The BNZ-BusinessNZ Performance of Composite Index (PCI), which combined the results of both the PSI and PMI, showed that both options for measurement improved in May, with values of 53.1 and 53.9, the highest values since September and June 2010 respectively, although it "would not be described as strong," said a statement from Business New Zealand.
BANK CONCERNS
Bank of New Zealand senior economist Craig Ebert said regional divergences were becoming important for the economy.
"This can be paraphrased as Auckland continuing to lead the way, rural-based areas rapidly catching up on the back of booming commodity income, Wellington capped by way of the Budget, and Christchurch severely disrupted. Internal and external migration trends will also be well worth watching, amid limited population growth for New Zealand as a whole."
However, the ASB Bank in its Business Weekly Economic Report warned Monday the continuing instability in Christchurch, particularly the two major tremors on June 13, were a "further setback for the economy."
Despite some encouraging figures, it warned, the New Zealand recovery was "likely to be a gradual one," given developments globally, particularly in Europe.
"Leaving aside the ongoing uncertainty in the wake of continued aftershocks in Christchurch, the continued high level of household debt will likely limit the extent of recovery in household demand, " said the ASB report.
Editor: Chen Zhi
English.news.cn 2011-06-20 15:30:13 FeedbackPrintRSS
WELLINGTON, June 20 (Xinhua)
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