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NZ wholesale trade numbers down

NZN 6/06/2016 Paul McBeth

New Zealand wholesale trade fell for a second quarter in the first three months of this year as a weak agricultural sector kept a lid on sales of basic materials.

Seasonally adjusted sales fell 0.4 per cent in the three months ended March 31, adding to the 0.3 per cent decline in the December quarter, Statistics New Zealand said.

The quarterly fall was driven by a 3.7 per cent drop in sales of basic materials, which spans agricultural, mineral, metal and chemical, and timber and hardware goods and products, its fourth decline in five quarters. Motor vehicles and auto parts wholesale trade fell 4.2 per cent in the quarter.

"As was the case last quarter, this quarter's fall in total wholesaling was led by the basic material industry," business indicators senior manager Neil Kelly said.

"The fall in this industry was led by reduced sales to the agricultural sector."

New Zealand's primary sector has been in the doldrums after last year's slump in global dairy prices sapped the incomes of those farmers and their ability to purchase other rural services.

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.

Actual wholesale trade rose 2 per cent to $22.26 billion in the three months ended March 31 from the same period a year earlier, with grocery, liquor and tobacco product sales - the biggest industry in the series - up 5.4 per cent to $7.05b. Sales of basic materials - the second-biggest industry - was down 4.8 per cent to $4.62b, its fifth quarter of contraction and the smallest value traded since June 2013.

The data show wholesale stocks built up 4 per cent to $10.6b in the quarter from a year earlier.

On a seasonally adjusted basis, wholesale stocks shrank 0.4 per cent in the quarter, snapping five quarters of expansion.

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