Slowdown casts bigger shadow

By JIM EAGLES

Further pointers to the widely expected slowdown in the economy this year came in the latest figures on migration and commodity prices issued yesterday.

The ANZ Commodity Index for January recorded a 3.6 per cent drop in returns due to the rise of the kiwi dollar.

And Statistics New Zealand's migration figures for December showed an inward movement 15 per cent lower than in November.

Both figures are still at historically high levels but down from the peaks that have provided much of the country's economic impetus in recent years.

Statistics NZ's figures show that permanent and long-term arrivals exceeded departures during December by 2840, down from the surplusof 3360 in November, and theweakest number since June.

Nevertheless, the net migration gain for the full year was 38,200, a new high, and a vast improvement on the net gain of 9700 in 2001 or the 11,300 net loss in 2000.

Deutsche Bank chief economist Ulf Schoefisch said that while migration levels were still high, inflows were continuing to weaken and he expected the recent tightening of criteria to have an increasing effect.

"Even without a significant reduction in the level of net migration over the next six months, the growth impulse from the associated population growth is weakening, as residential construction activity settles at the higher level reached over the past year andits growth rate gradually falls to zero."

The ANZ's New Zealand Dollar Commodity Price Index is also well above the levels that have prevailed for most of the past decade but the fall in January means it is now 15.2 per cent below what it was a year previously.

The World Commodity Price Index actually rose 1.3 per cent during the month and is 4.6 per cent higher than 12 months before.

Dairy products recorded their sixth consecutive monthly increase, owing to a good balance between supply and demand in the world market, although ANZ economist John Bolsover believes the cycle is now probably close to its top.

Wool, beef and skins also recorded good increases.

But, as in previous months, the rise in the kiwi dollar was the dominant influence.

Bolsover said returns to New Zealand exporters were now 24 per cent below the April 2001 peak but emphasised that the prices were still "relatively robust from a broader historic perspective".