The sole piece of domestic data last week was a surprising 0.2% lift in manufacturing sales.
However, the rosy headline was entirely due to a 23% lift in sales of dairy, most probably reflecting inventory reduction. The rest of the survey implied dire falls in production for most industries, and an extremely weak quarter for manufacturing.
This week’s data calendar is fairly full, starting with net migration today. Net migration has been rising sharply over the past few months, as the number of Kiwis crossing the Tasman has plunged. Annual total net migration for the year to May 2009 was a massive 11,200, compared to just 3,800 in the year to December 2008. Rising net migration is an important swing factor for the New Zealand economy, and has no doubt played an important role in the recent housing market pickup. The RBNZ will be taking careful note.
The perkier housing market, along with improved news from overseas, could see the Westpac June McDermott Miller Consumer Confidence Index rise a little when it is released on Wednesday. But the positive vibes will be tempered by confidence-sapping rises in long-term interest rates, rising fuel prices, rising unemployment, the axing of the 2010 and 2011 tax cuts, and now the outbreak of swine flu.
