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New Zealand Recession Risks Grow as Export Volumes Fall Again

(Bloomberg)

(Bloomberg) -- New Zealand export volumes fell for a second straight quarter, adding to signs of a mid-year recession.

Exports of goods dropped 1.8% in the third quarter from the previous three months, Statistics New Zealand said Tuesday in Wellington. Imports rose 3% meaning net exports — which are comparable to measures used in the gross domestic product report — fell 4.8% from the second quarter, when they dropped 7.9%.

The Reserve Bank last week reiterated it expects a small economic contraction in the third quarter, putting the nation into a second recession in less than two years. The central bank has been aggressively cutting interest rates as the weak economy suppresses inflation, and signaled last week it expects to deliver a third straight 50-basis-point reduction at its next decision in February.

The economy contracted 0.2% in the second quarter.

A report last month showed retail sales fell in the third quarter. Key data on construction and manufacturing are due in coming days ahead of the GDP report on Dec. 19.

Today’s report showed shipments of meat and wool declined in the quarter, even as dairy and forestry volumes rose. The data only reports goods exports and not services such as tourism, which are among the nation’s biggest export earners.

The jump in import volumes, which followed a 3.6% gain in the second quarter, was led by a surge in fuel shipments and purchases of iron and steel. 

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