Dairy boom helped when recession hit, says report

Photo / Mark Mitchell.

A 58.3 per cent jump in income for the dairy industry underpinned a 7.1 per cent increase in income for all industries in the 2008 financial year, according to Statistics New Zealand Annual Enterprise Survey data released this morning.

The figures cover the first months of the New Zealand recession, but pick up only a fraction of the impacts of the global financial crisis, which started in the last quarter of calendar 2008.

While total industry income rose to $560.8 billion in the 2008 financial year, margins were squeezed across the board. Surplus before income tax across all industries of $53.5 billion was down $11.9 billion on the 2007 financial year.

Salaries and wages jumped ahead 8.7 per cent in the 2008 financial year, compared with increases of 6.8 per cent and 7.7 per cent in 2007 and 2006 respectively. The total value of fixed assets also showed strong growth of 10.1 per cent, down slightly from the previous year's 11.2 per cent increase.

The largest sector increase in total income by dollar value was recorded in the wholesale trade, which rose 9.8 per cent, or $6.27 billion in 2008. The 20.1 per cent, $5.09 billion, jump in agricultural receipts was the largest percentage rise and made agriculture the second largest industry category by total income after wholesale.

Most of the agriculture increase came from the dairy industry, which experienced very strong global prices in 2007 and early 2008, and recorded an increase in sector revenue of $4.1 billion, or 58.3 per cent, on the previous year.

Dairy farming accounted for 38.6 per cent of total agriculture sector receipts, against 25.7 per cent for sheep, beef and grain farming, 10.1 per cent for horticulture, and 8.7 per cent for forestry and logging.

Manufacturing sector receipts were the third largest and rose by $4.75 billion, or 5.6 per cent

-BUSINESSWIRE