WELLINGTON: New Zealand’s wholesale trade shrank in the first three months of the year, snapping six quarters of expansion.
A decline in goods from the primary sector lead the contraction, in line with an ongoing weakness in global dairy prices. Seasonally adjusted sales fell 0.8 per cent in the three months ended March 31.
This follows 0.2 per cent growth in the December quarter, and is the first decline since June 2013, according to Statistics New Zealand. “Most wholesale industries had falls in sales, with the only increase coming from grocery wholesaling,” business indicators manager Neil Kelly said in a statement.
Wholesale trade acts as an intermediary between the manufacturer and the consumer, and the survey is typically watched by economists as it feeds into the national accounts and gross domestic product calculations.
Basic materials sales, which includes primary goods such as agriculture products, led the decline, falling a seasonally adjusted 3.2 per cent in the quarter, its first contraction since June 2013.
The March quarter captured ongoing weakness in global dairy prices, which is seen as putting the country’s biggest export sector under risk, and as drought conditions were declared in some parts of the country.
Machinery and equipment sales fell 2.6 per cent, motor-vehicles fell 0.1 per cent, other goods, including textile, pharmaceuticals and furniture, dropped 2.3 per cent and commission-based wholesaling shrank 9.3 per cent.
Grocery-liquor and tobacco products, which accounts for almost a third of all activity, was the only sector to expand in the quarter, advancing 2.8 per cent.
