Shipping containers are moved at the Port of Lyttelton, near Christchurch, New Zealand, on Sept. 17, 2020.Mark Baker/The Associated Press
New Zealand’s economy has dipped into recession as higher interest rates take their toll, new figures released Thursday show.
Gross domestic product fell by 0.1 per cent in the March quarter, following a revised 0.7 per cent fall in the previous quarter, Statistics New Zealand said. That fulfills the nation’s definition of a recession, which is at least two consecutive quarters of negative growth.
The slowdown comes after New Zealand’s central bank raised its benchmark interest rate 12 straight times to 5.5 per cent as it tries to tame inflation. The rate is at its highest level since 2008, making it more expensive for people to borrow money for homes, cars and other purchases. The Reserve Bank of New Zealand has indicated it doesn’t plan to raise the rate any further for now and that its next move will be a cut.
The downturn in growth was in line with economists’ expectations, and the currency was little changed, with one New Zealand dollar trading at around 62 U.S. cents.
Taken over the full year, the picture looked rosier. New Zealand’s economy grew by 2.9 per cent after strong growth in the first two quarters. And with such a small dip in the March quarter, it’s possible the recession call could be reversed when the latest figures are revised next quarter.
Contributing to the drop in growth were a series of deadly weather events, including flooding in Auckland and a cyclone.
“The adverse weather and resulting flooding caused significant damage and disruption, particularly across the North Island,” Statistics New Zealand wrote in a release.
The biggest drivers of the downturn were business services, down 3.5 per cent, and transport, postal and warehousing, down 2.2 per cent. Going against the trend, media and telecommunications rose 2.7 per cent.
One of the most notable affects of higher interest rates has been on the housing market. Since peaking 18 months ago, average house prices in New Zealand have fallen by about 18 per cent. However, there are signs the market might have reached a low point. Statistics released Thursday showed prices were flat when compared with the previous month and sales volumes were rising in some areas.
Kiwibank economists Jarrod Kerr and Mary Jo Vergara said the central bank had raised rates too high and they expect the economy will contract more over the year ahead.
“If households spend less, which is what we are seeing, then the economy will contract harder,” they wrote in an analysis. “If businesses pull back on their hiring and investment, which is what we’re hearing, then the economy will contract harder.”
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
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