Wholesale trade grows at fastest quarterly pace in two years

New Zealand wholesale trade grew at its fastest quarterly pace in two years during the second three months of the year as strong fruit exports helped underpin sales of grocery, liquor and tobacco products.

Seasonally adjusted sales rose 1.7% in the three months ended June, snapping two quarterly declines, and registering the biggest increase since June 2014, Statistics New Zealand says.

The quarterly gain was pushed by a 2% increase in grocery, liquor and tobacco products, which account for almost a third of all wholesale trade.

"Kiwifruit export values were at an all-time high in the months of May and June," business indicators senior manager Neil Kelly says. "It was also a good quarter for apple exporters."

Wholesale trade covers intermediary transactions between manufacturers and consumers, which feeds into the national accounts and is used by economists to predict wider economic activity.

Statistics NZ changed its methodology in collecting data for the September survey to use more administrative data and reduce its reliance on surveys, while also ending its split of raw materials and finished goods in measuring total stocks.

Basic materials, which spans agricultural, mineral, metal and chemical, and timber and hardware goods and products, rose 1.1%, turning around two quarterly declines when the primary sector was in the doldrums following last year's slump in global dairy prices. Since then, dairy prices have recovered, and analysts are picking another gain at the upcoming GlobalDairyTrade auction.

Sales of motor vehicles and auto parts jumped 5.3% in the quarter, the largest move, as new vehicle sales continue to break records with a strong kiwi dollar lowering the cost of imports and cheap petrol encouraging more motorists on the roads.

Sales of other goods rose 2.8%, while machinery and equipment sales fell 1.1%, the first quarterly decline in a year, and commission-based sales were down 1.7%.

Actual wholesale trade rose 4% in the three months ended March to $23.65 billion from the same period a year earlier, with grocery, liquor and tobacco products – the biggest industry – up 6.4% to $7.82 billion, and basic materials – the second-biggest industry – down 2.5% to $4.65 billion.

Wholesale stocks built up 3.2% to $10.71 billion in the quarter from June 2015, led by a 12% gain in grocery, liquor and tobacco stocks.

On a seasonally adjusted basis, wholesale inventories shrank 0.1% in the quarter.

(BusinessDesk)

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