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May 2007 Executive Summary • Growth appears to be re-accelerating in the first half of 2007, as forecast in the Budget Update. • Domestic demand, underpinned by a buoyant labour market, remains strong. • Tradables inflation is abating, but pressures remain in the domestic economy. • A decline in firms’ outlook for their own activity signals slower growth in the second half of 2007. Data released during May, especially the record quarterly retail sales out-turn, confirmed our view in the Budget Update that the reacceleration in domestic demand in late 2006 will be sustained throughout the first half of 2007. We believe the retail industry and some other parts of the services sector will be the largest contributors to around 1.0% GDP growth in the March quarter. However, a fall in business confidence points to slower growth in the second half of the year as forecast in the Budget Update. The largest quarterly increase in retail sales since the series began in 1995 was driven by discounting of goods (thanks to the appreciating dollar in the March quarter), continued solid wage growth, house price growth (and therefore wealth growth), and high dairy prices. An expected higher dairy payout appeared to fuel retail spending in Waikato and rural South Island, with these regions recording the largest quarterly increases. The labour market remains buoyant, with data released during the month showing strong employment growth in the March quarter, consistent with recent business surveys showing elevated hiring intentions. The unemployment rate rose slightly however, because of a large increase in the participation rate. Labour income remains on forecast, owing to lower than forecast wage growth and a fall in hours worked. We examine New Zealand’s working hours in this month’s special topic. A fall in firms expecting their own activity to increase over the coming year is consistent with our view that growth will slow in late 2007. The Budget Update outlined a slow-down in late 2007, thanks to the lagged effects of higher interest rates and the high exchange rate. The inflation dichotomy continues with an appreciation of the exchange rate in the March quarter containing the prices of imported goods but a stretched domestic economy ensuring non-tradable inflation remains strong. The appreciating dollar saw falls in the prices paid for inputs (when measured in aggregate), and soft growth in the prices of capital goods. Firms’ average expectations of consumer inflation for one and two years ahead remained stable. Merchandise trade recorded a deficit of $212m in April, leading to an increase in the annual trade deficit. Contributing to this was an increase in oil shipments and a large oil production vessel. Despite rising commodity prices (for dairy and logs especially), the trade deficit is not expected to ease significantly over 2007, owing to continued strength in the domestic economy driving import demand. High commodity prices have contributed to a high exchange rate, as have market perceptions that the Reserve Bank may raise the Official Cash Rate on 7 June. ISSN-1175-6780 – Text finalised 1 June 2007 Page 1 Commentary We expect GDP to record an increase of around 1.0% in the March quarter… GDP growth rebounded in the December quarter and we are predicting this strength continued in the March quarter. We expect growth of around 1.0%, slightly higher than our Budget Update forecast of 0.9%. As has been the case over recent history, we believe the services sector will make the largest contribution to GDP growth. Further indicators such as wholesale trade and manufacturing data are released in June and will shed more light on the March quarter GDP result, which will be released on 29 June. … with a strong contribution from private consumption growth The December quarter showed a lift in domestic demand. Consistent with our Budget Update view, data released during May, such as retail sales, employment growth, wages and house prices, indicate this re-acceleration is set to continue in the first half of 2007. Private consumption growth is still likely to be relatively strong in the March quarter, possibly greater than the 1.3% increase forecast in the Budget Update. Employment growth was surprisingly high… According to the Household Labour Force Survey, employment growth was 1.2% in the March quarter, significantly higher than market expectations of 0.4% and our Budget Update forecast of 0.2%. This out-turn represents a significant bounce-back in employment growth from a weak period in the second half of 2006. Annual employment growth in the March quarter was 1.7%, up from the December quarter when annual growth was 1.4%. While the employment growth series is volatile on a quarterly basis, this bounce-back is consistent with the resurgence we have seen in economic activity of late and recent business surveys that show hiring intentions remain elevated. …and labour force participation increased Despite the large increase in employment, the unemployment rate rose slightly in the March quarter (from 3.7% to 3.8%), due to a large increase in the participation rate. Labour force participation rose to 68.6% (seasonally adjusted), its second highest rate since the series began in March 1986. An increase in people doing part- Monthly Economic Indicators – May 2007 – The Treasury time work appears to be driving the increase in the participation rate and helps explain the quarterly 0.4% fall recorded in hours worked. Labour income growth is still at a high level… Labour income growth remains solid and in line with our Budget Update forecast, despite a higher than expected increase in employment. Labour income remained on forecast thanks to a fall in hours worked and lower than forecast wage growth. Despite being lower than forecast, and down from its mid 2006 peak, wage growth remains high. Once merit increases are removed, the Labour Cost Index (LCI) rose 3.2% in annual terms in the March quarter (fig. 1). Wage measures that include merit increases (such as the Quarterly Employment Survey’s hourly earnings and the unadjusted LCI) show annual wage growth of about 4.5%, again down from mid2006 highs, but still strong when compared to history. Figure 1 – Wage growth Annual % change 6 5 Annual % change 6 5 4 3 4 3 2 1 2 1 0 0 94 95 96 97 98 99 00 01 02 03 04 05 06 07 LCI salary & ordinary-time wages (unadjusted) QES average ordinary-time hourly earnings LCI salary & ordinary-time wages (adjusted) Source: Statistics NZ …which supported record retail sales growth in the March quarter The March 2007 quarterly increase in retail sales was the largest since the series began in 1995 (by all measures - volumes and values, core and total). The increases were relatively broad-based with most ‘core’ retail store types (i.e. excluding automotive related store types) recording increases in volumes sold in the March quarter. Stores selling consumer durables such as hardware, appliances, recreational goods, clothing and footwear, recorded the largest increases in the quarter amongst the ‘core’ group. The core retail sales deflator fell 0.3% in the quarter, indicating that firms have been discounting products to increase volumes sold. Page 2 Stores selling consumer durables discounted particularly heavily (the deflator for these store types fell 1.8% in the quarter). The appreciation of the New Zealand dollar in the March quarter helped firms to discount, while maintaining margins. Motor vehicle retailing volumes grew particularly strongly in the March quarter (6.3%), rebounding from weakness over the past two years. One interpretation of this result is it merely reflects a bounce-back after a weak period, possibly enhanced by the lagged effect of lower petrol prices (compared to mid last year) lowering the cost of running cars (fig. 2). Figure 2 – Car sales vs. petrol prices Quarterly % change 6 Quarterly % change -10 4 -5 2 0 0 5 -2 10 Figure 3 – TWI and Terms of Trade Index Points 1150 Index Points 75 70 1100 65 1050 60 1000 55 950 50 900 45 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 Terms of Trade (LHS) TWI (RHS) Source: Statistics NZ, RBNZ March quarter’s strong household spending looks to have continued into April with the value of retail spending funded on electronic cards increasing 1.0% in April compared to March (seasonally adjusted). …as has house price growth Source: Statistics NZ House price growth is also contributing to the continued strength in household consumption by boosting the wealth of homeowners. Data from the Real Estate Institute of New Zealand (REINZ) showed a sizable increase in the median house price in the month of April to $346,200. Prices in April were 14.4% higher than in April 2006, the highest annual growth rate since November 2005. High dairy prices appear to have also supported retail sales… Slowing net migration may dampen house price growth… The expectation of a higher dairy payout appeared to boost retail sales in Waikato (2.4% quarterly growth) and ‘rest of the South Island’ (2.3% quarterly growth) in the March quarter. Fonterra subsequently announced in May that the payout for the 2006/07 season would be $4.35 per kilogram of milk solids (kg/ms) compared to the previous forecast of $4.15. Strong departure growth in the first four months of 2007 meant annual net permanent and long-term (PLT) migration fell to a lower-than-forecast 11,200 in April, down from a recent peak of 14,800 in November 2006. In the April month, arrivals exceeded departures by 140 compared to 1,830 in November 2006 (all figures are seasonally adjusted). Depending on how much of the increased return is used to retire debt or fund new investment, higher dairy returns look set to contribute positively to private consumption into next year with Fonterra announcing later in May that the forecast payout for the 2007/08 season is $5.53 per kg/ms. Higher dairy prices are advantageous not only to rural New Zealand. All consumers benefit as the resulting higher terms of trade lead to a higher exchange rate lowering the price of imported goods (fig. 3). According to REINZ, house sales fell for the fifth month in a row, falling 6.4% in April compared to March (seasonally adjusted). The easing in house sales and lack of growth in building consents (the number of building consents excluding apartments issued in April was about the same as December last year) is consistent with the lower number of PLT migrants (and higher mortgage rates). The Budget Update forecast this easing in general housing activity to feed into a slowing in the rate of quarterly house price growth in late 2007. -4 00 01 02 03 04 05 06 07 Cars sold (2 quarter moving average, LHS) Petrol prices (2 quarter moving average, RHS, inverted) 15 Monthly Economic Indicators – May 2007 – The Treasury Page 3 ...but not wage growth While slowing PLT migration will slow house price growth, slowing migration will also restrict growth in the labour supply keeping unemployment low and pressure on wages. A stretched productive sector means nontradables inflation remains high … The Capital Goods Price Index increased 0.4% in the March quarter (compared to 0.7% in 2006 December quarter) bringing annual growth down to 3.7% (from 4.1% last quarter). The key feature of the out-turn was the split between price growth in tradable and non-tradable capital goods. The current pressure on productive capacity in the New Zealand economy means non-tradable inflation pressures continue to be strong. Residential building costs, for example, increased 1.0% in the quarter. …but the high exchange rate lowered the prices of imported goods The higher exchange rate in the March quarter contributed to containing the prices of traded capital goods, with the prices of plant, machinery and equipment falling or flat in the quarter (at an aggregate level). The appreciating exchange rate (and lower fuel prices) also lowered the input Producer Price Index (a measure of the input costs to firms, excluding labour) by 1.6%, with the manufacturing (-1.5%), wholesale (-8.0%), retail (-0.2%) and transport (-2.1%) industries all recording quarterly falls in their input costs. Prices received for firms’ outputs fell 0.2% in the quarter. A number of industry-specific factors caused this. Increased supply lowered the price received for horticultural products, whilst lower world meat prices and a higher exchange rate weighed heavily on lamb prices. Lower spot prices for electricity (thanks to lower fuel and gas prices) meant the wholesale price for electricity fell. Pricing intentions ease… According to the May National Bank Business Outlook, a net 29.2% of firms expect to raise prices over the coming year compared to 31.5% a month ago, possibly because of a weaker outlook for their own activity. Despite falls in pricing intentions, firms’ expectations of average consumer inflation (as measured by the Reserve Bank ACNeilson Monthly Economic Indicators – May 2007 – The Treasury survey) remained stable with inflation expected to be 2.7% in one year and 2.6% in two years. Recent momentum is expected to continue during most of 2007… As outlined in the Budget Update, solid labour income growth, rising house prices and a strong terms of trade are all expected to contribute to momentum in growth in the first half of this year. The extent to which this momentum is maintained is a key question. The Budget Update had GDP quarterly growth moderating in the second half of 2007, due to a combination of a high exchange rate and recent interest rate increass. The May National Bank Business Outlook supports this view, with a large fall in firms’ own activity expectations for the year a head (fig 4). A net of firms 13.7% expected their activity to improve in May compared to a net 23.8% in April (seasonally adjusted). Expectations about future activity were particularly weak amongst those most exposed to the tighter monetary conditions, with manufacturers and builders being the most negative about future activity. Figure 4 – Own activity and GDP Net respondents (s.a.) 80 Annual % change 8 60 6 40 4 20 2 0 0 -20 -2 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 National Bank activity outlook (Advanced 6 months) GDP (RHS) Source: Statistics NZ Monthly trade in deficit… Monthly trade recorded a deficit of $212 million in April after a $62 million surplus in March. This led to an increase in the annual trade deficit to $6,020 million in April (fig. 5). Higher oil imports in April and the importation of a large oil production vessel meant imports were 13.5% higher than April last year. However, when the value of large individual import items ($231 million) are removed, imports increased by only 5.8%. Strong domestic demand resulted in strong monthly growth in imports of consumption goods and passenger cars of 3.8% and 7.0% in the month respectively. Page 4 On the export side, high commodity prices meant that exports were 5.2% higher than April 2006. The improvement in exports is due to a lift in values of fruit (mainly kiwifruit), logs and wood, and dairy products exported. Figure 5 – Merchandise trade balance (annual) NZ$ (billion) 45 NZ$ (billion) 2 40 35 30 Overall oil prices fell slightly in May -2 After peaking at just under US$67 per barrel at the start of the month, West Texas Crude oil prices fell to US$61, before recovering to around US$64 per barrel at the end of May. The increase in the second half of May was due to uncertainty around the geopolitical situation in some oil exporting countries, most notably Nigeria. -5 20 15 0 -3 25 96 97 98 99 00 01 02 03 04 05 06 07 Total exports Total imports Trade balance (RHS) Zealand dollar weakness as it readjusted from its April highs, as well as strength in the US dollar. The New Zealand dollar also weakened slightly against the Pound, Yen, the Australian dollar and the Euro. The high terms of trade and market perceptions that the Reserve Bank may raise the Official Cash Rate on 7 June have kept the currency at a high level, however. -7 Source: Statistics NZ What’s coming up… The exchange rate fell slightly in April A number of key pieces of data are due to be published in June. On 7 June, the Reserve Bank of New Zealand will review the Official Cash Rate. Market expectations on 1 June were for the Official Cash Rate to remain steady at 7.75%, with the median probability of an increase being 35% amongst bank economists. At the end of May, the New Zealand dollar was buying US$0.737, having fell 1.2% against the US during the month. The fall reflects both New Publication of Balance of Payments figures and Gross Domestic Product in late June will complete the picture of the economy in the March quarter. Despite rising commodity prices (for dairy and logs especially), the trade deficit is not expected to ease significantly over 2007 owing to continued strength in the domestic economy driving import demand. Special Topic: New Zealand’s Working Hours This special topic examines working hours in New Zealand and compares them with other nations in the Organisation for Economic Co-operation and Development (OECD). Figure 6 – Employment distribution in New Zealand1 % of employment 30 25 20 Relatively high hours and more flexibility… Working hours are relatively high in New Zealand, especially compared to Western Europe. In 2005, the average employed person worked 34.8 hours per week, which was about eighth highest among the 30 OECD nations. South Korea was highest at 45.3, followed by Greece, the Czech Republic, Hungary, Poland, Turkey, Mexico, and New Zealand, with the United States close behind. New Zealand has a high incidence of part-time work (under 30 hours a week) and of long hours. In 2005, 22% of employment was part-time, the sixth equal highest in the OECD, and 17% was at least 50 hours a week. Monthly Economic Indicators – May 2007 – The Treasury 1986 2000 2006 15 10 5 0 0 1- 10- 20- 30- 35- 40 41- 45- 50+ Hours worked per week Source: Statistics NZ Nevertheless, 53% of those employed in 2005 worked 30 to 49 hours, including a quarter that reported exactly 40 hours. Further, almost all 1 Someone who usually works a positive number of hours can have actual hours of zero (e.g. if they are on holiday). Page 5 growth in employment since 2000 has been in work of 30 to 49 hours, mainly at the expense of longer working weeks of at least 50 hours (fig. 6). …but average hours have been trending down Although still high relative to other OECD nations, more recent data show average hours trending down to 34.2 per week in the March 2007 year, which is the lowest in at least 20 years (fig. 7). The fall may reflect some of these factors: firms reducing hours of staff because of the slowing in economic growth; workers scaling back hours to enjoy more leisure; some workers anticipating an extra week’s leave from 1 April 2007; changes in composition due to growth in the service sector and labour force participation. Figure 7 – Average working hours per employed person in New Zealand Hours per week (annual average) 37 36 35 34 33 1986 1989 1992 1995 1998 2001 2004 2007 Average weekly hours worked per employed person Source: Statistics NZ Individual working hours have fallen slightly, but long hours can show up more in data for couples. Women still work shorter hours on average than men, but rising employment rates for women have lifted household hours worked, in many cases above 100 a week. Those working the longest hours tended to be among the highest qualified in 2001 after being among the least qualified in 1986. The number of hours is one aspect of working life. Others are what times the hours are worked (e.g. 40 hours may be 9pm-7am Friday-Monday), the nature of work, and how many jobs are worked. Over the past 20 years, the proportion of workers holding more than one job has been fairly steady around 4%, while overtime hours have fallen. Long hours but moderate labour productivity The aggregate number of hours worked in New Zealand per head of population (instead of per worker as discussed above) is the sixth highest in the OECD. The high ranking not only reflects high average hours, but also low unemployment and high labour force participation. However, labour productivity (output per hour) is relatively modest in New Zealand. Growth in total hours worked slowed to just 0.5% over the year to March 2007 because of the fall in average working hours and easing employment growth. If GDP rose by around 1.7% in the year to March 2007 as expected (GDP data are due for release on 29 June), then labour productivity growth would exceed 1% per annum for the first time in three years. Recent GDP growth has largely been driven by more hours worked, with labour productivity growth generally modest due to factors such as labour hoarding (when the economy slowed) and the large increase in labour force participation. Although there is still room for higher participation by some groups, labour market participation is already high by OECD standards and offers less scope for growth in the long term than labour productivity. Monthly Economic Indicators is a regular report prepared by the Forecasting and Monitoring team of the Treasury. Disclaimer: The Treasury has made every effort to ensure that the information contained in this report is reliable, but makes no guarantee of its accuracy or completeness and does not accept any liability for any errors. The information and opinions contained in this report are not intended to be used as a basis for commercial decisions and the Treasury accepts no liability for any decisions made in reliance on them. The Treasury may change, add to, delete from, or otherwise amend the contents of this report at any time without notice. Contact for enquiries: The Treasury PO Box 3724 Wellington NEW ZEALAND Monthly Economic Indicators – May 2007 – The Treasury [email protected] Tel: +64 4 472 2733 Fax: +64 4 473 0982 Page 6 New Zealand Key Economic Data 4 May 2007 Quarterly Indicators 01 June 2007 Quarterly Indicators 2005Q3 2005Q4 2006Q1 2006Q2 2006Q3 2006Q4 2007Q1 qtr % chg1 0.1 -0.1 0.7 0.4 0.3 0.8 ... 2.8 2.2 2.0 1.6 1.4 1.5 ... Real Private consumption ann ave % chg qtr % chg1 0.5 0.5 0.8 -0.4 0.3 1.1 ... 4.8 4.7 4.3 3.3 2.5 2.0 ... Real Public consumption ann ave % chg qtr % chg1 -0.2 1.5 0.8 1.8 0.8 0.8 ... 4.2 4.1 4.7 4.0 4.1 4.2 ... Real residential Investment ann ave % chg qtr % chg1 -5.1 1.8 1.0 -6.1 3.8 2.3 ... ann ave % chg qtr % chg1 -4.3 -4.3 -4.7 -4.8 -3.2 -2.4 ... Export volumes -1.1 1.1 -1.8 3.2 3.0 -2.7 ... 1.0 -0.6 -0.3 0.4 1.4 2.0 ... Import volumes ann ave % chg qtr % chg1 1.1 -3.6 -0.7 -1.4 0.8 1.4 ... ann ave % chg 8.6 5.5 4.1 1.0 -2.3 -2.5 ... Nominal GDP - Expenditure basis ann ave % chg 5.5 4.7 4.6 3.9 3.5 4.0 ... Real GDP per Capita ann ave % chg 1.7 1.3 1.1 0.7 0.4 0.5 ... Real Gross National Disposable Income ann ave % chg 2.0 1.1 0.6 0.0 -0.2 0.6 ... NZ$ millions -12992 -13931 -14922 -15141 -14508 -14447 ... % of GDP -8.5 -9.0 -9.6 -9.7 -9.2 -9.0 ... NZ$ millions -10139 -10753 -11182 -11782 -11843 -12097 ... qtr % chg -0.4 -2.5 0.8 2.6 -2.2 2.4 ... ann % chg 0.9 -1.9 -3.3 0.5 -1.3 3.7 ... Gross Domestic Product (GDP) Real Production GDP External Trade Current account balance (annual) Investment income balance (annual) Merchandise terms of trade Prices CPI inflation qtr % chg 1.1 0.7 0.6 1.5 0.7 -0.2 0.5 ann % chg 3.4 3.2 3.3 4.0 3.5 2.6 2.5 Tradable inflation ann % chg 1.9 1.8 2.1 3.8 3.0 1.1 0.8 Non-tradable inflation ann % chg 4.4 4.3 4.2 4.1 4.0 3.9 4.0 GDP deflator ann % chg 2.0 1.8 1.8 2.0 2.7 2.4 ... Consumption deflator ann % chg 2.1 2.2 2.3 3.3 3.3 2.8 ... 2143.0 Labour Market Employment (HLFS) 000s7 2086 2088 2107 2127 2116 2118 qtr % chg1 1.1 0.1 0.9 0.9 -0.5 0.1 1.2 ann % chg1 3.2 1.5 2.6 3.1 1.4 1.4 1.7 Unemployment rate %1 3.6 3.6 3.9 3.6 3.8 3.7 3.8 Participation rate %1 68.1 68.0 68.5 68.7 68.2 68.0 68.6 qtr % chg ann % chg 1.1 3.1 0.8 3.1 0.6 3.2 0.7 3.3 1.0 3.2 0.9 3.2 0.6 3.2 0.8 LCI salary & wage rates - total (adjusted)6 LCI salary & wage rates - total (unadjusted)6 QES average hourly earnings - total6 Labour productivity7 qtr % chg 1.9 1.4 1.1 1.0 1.4 1.3 ann % chg 5.3 5.4 5.7 5.5 5.1 4.9 4.5 qtr % chg ann % chg 1.0 4.3 0.8 5.4 1.4 5.3 1.2 4.4 1.6 5.0 0.8 5.0 1.0 4.6 ann ave % chg 0.0 0.4 -0.1 0.2 0.8 0.7 ... Confidence Indicators/Surveys WMM - Consumer confidence3 Index 120.2 110.1 109.3 106.0 111.7 119.7 117.7 QSBO - general business situation4 net % -32.0 -61.0 -49.0 -43.8 -19.1 3.5 -15.3 QSBO - own activity outlook4 net % 9.3 -6.1 -1.6 -0.8 10.5 15.0 16.1 Monthly Economic Indicators – May 2007 – The Treasury Page 7 Monthly Indicators Monthly Indicators 2006M11 2006M12 2007M 1 2007M 2 2007M 3 2007M 4 2007M 5 ... External Sector Merchandise trade - exports Merchandise trade - imports Merchandise trade balance Visitor arrivals mth % chg1 -1.5 6.1 -1.1 -2.0 2.8 -0.5 ann % chg1 8.2 10.9 12.9 9.8 4.4 5.2 ... mth % chg1 -8.2 2.0 4.7 -5.1 1.8 3.1 ... ... ann % chg1 -5.6 11.5 6.7 0.0 4.8 13.8 NZ$ million number1 -820 -346 -825 -129 62 -212 ... 206,610 203,760 197,630 210,540 208,290 203,710 ... mth % chg1 -11.3 -4.0 4.7 6.9 -1.9 0.7 ... ann % chg1 -1.0 -20.7 -5.2 -8.4 3.4 9.0 ... mth % chg1 2.0 4.3 -2.0 -1.4 -1.0 -6.4 ... ann % chg1 6.4 19.1 19.9 18.1 8.3 9.0 ... NZ$1 325,119 331,553 329,440 338,071 340,117 346,163 ... mth % chg1 0.0 0.2 1.0 2.5 0.8 ... ... ann % chg1 5.5 5.2 6.7 8.2 9.0 ... ... mth % chg1 -0.1 0.7 0.5 2.1 1.3 ... ... ... Housing Dwelling consents - residential House sales - dwellings REINZ - median dwelling price Consumer Core retail sales Total retail sales ann % chg1 4.0 5.0 5.7 6.3 8.4 ... mth % chg -4.0 -7.5 11.2 -10.1 15.3 -17.5 ... ann % chg mth % chg1 -15.3 -17.8 -5.8 -12.5 -11.0 -4.8 ... -3.4 -2.0 7.1 -2.6 -2.2 1.8 ... ann % chg1 6.2 7.0 9.7 8.0 3.0 14.6 ... Permanent & long-term arrivals number1 7,090 6,610 6,530 6,650 7,130 6,570 ... Permanent & long-term Departures number1 5,260 5,570 6,110 6,130 6,490 6,430 ... Net PLT migration number1 1,830 1,040 420 520 640 140 ... number 14,757 14,609 14,116 13,151 12,081 11,222 ... New car registrations Credit card billings Migration Net PLT migration (12 month total) Commodity Prices Brent oil price US$/Barrel 59.22 62.26 54.50 57.97 62.36 67.69 ... WTI oil price US$/Barrel 59.29 62.03 54.78 59.27 60.56 63.97 ... ANZ NZ commodity price index mth % chg 1.3 0.7 0.8 1.7 1.6 0.1 ... ann % chg 10.8 12.9 12.2 11.7 8.7 4.7 ... mth % chg 2.1 3.8 1.3 1.4 2.0 4.8 ... ann % chg 5.3 9.4 11.1 13.0 17.1 20.8 ... NZD/USD $2 0.6689 0.6918 0.6953 0.6939 0.6982 0.7347 ... NZD/AUD $2 0.8661 0.8805 0.8883 0.8865 0.8815 0.8880 ... June 1979 = 1002 66.6 68.0 69.1 68.8 68.6 71.3 ... 7.25 7.25 7.25 7.25 7.50 7.75 ... 90 day bank bill rate % %2 7.61 7.66 7.70 7.75 7.88 7.98 ... 10 year govt bond rate %2 5.71 5.77 5.93 5.94 5.87 6.06 ... National Bank - business confidence net % -14.0 -7.7 -4.2 -5.9 -12.5 -19.4 -48.3 National Bank - activity outlook One News5 - economic performance qtr % chg quarterly percent change mth % chg monthly percent change ann % chg annual percent change ann ave % chg annual average percent change net % 23.7 24.0 25.0 25.7 24.1 22.5 7.8 net % -6.8 -3.5 -0.3 3.0 -2.0 -4.0 Seasonally adjusted Average (11am) Westpac McDermott Miller Quarterly Survey of Business Opinion One News Colmar Brunton Ordinary time Production GDP divided by HLFS hours worked -8.0 ANZ world commodity price index Financial Markets Trade weighted index (TWI) Official cash rate (OCR) Confidence Indicators/Surveys 1 2 3 4 5 6 7 Sources: Statistics New Zealand, Reserve Bank of New Zealand, National Bank of New Zealand, NZIER, ANZ, Datastream, Westpac McDermott Miller, One News Colmar Brunton Monthly Economic Indicators – May 2007 – The Treasury Page 8