Rising costs eclipse gains from strong dollar

Income was up, but profits were down across all industries last year, according to provisional data from Statistics New Zealand yesterday.

Its Annual Enterprise Survey reported total income for the 2003 financial year was $398.4 billion, up 3.7 per cent compared with $384.1 billion the previous year. But the higher income was outstripped by a 4.5 per cent increase in total expenditure, which rose to $362.5 billion from $346.9 billion the year-earlier.

This led to a drop of 2.5 per cent in total operating surplus across all industries, to $40.7 billion from $41.8 billion the previous year.

The survey covers industries that contribute approximately 90 per cent of New Zealand's gross domestic product.

Statistics NZ said in a commentary that many industries posted higher income due to the stronger kiwi dollar, which buoyed consumer spending through cheaper imports. Inflows of permanent and long-term migrants were also a factor.

Industries servicing the domestic economy recorded strong income growth, with construction up 13.1 per cent, property and business services up 10.5 per cent, and retail trade up 8.2 per cent.

But several export-oriented businesses were negatively affected by the rising dollar and falling international commodity prices.

After solid growth in 2001 and 2002, income from dairy farming fell 19.9 per cent and livestock and cropping farming income was down by 7.6 per cent.

Salary and wages paid across all industries were buoyant, up 7.2 per cent, from $50.2 billion to $53.8 billion.

Total assets across all industries rose 7.9 per cent from $909.9 billion to $982.3 billion.

- NZPA