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NZ trade deficit almost halves in October from a year ago as imports drop faster than exports (Update 3)
November 27th, 2009New Zealand’s merchandise trade deficit contracted to NZ$487 million in October from NZ$994 million a year ago as both import and export values continued to trend downward, Statistics New Zealand said. (Update 3 includes video links.)
The October 2009 trade deficit represented 16.4% of exports, which was below an average of 30% of exports for the previous five years, Stats NZ said.
Trend values based on seasonally adjusted figures showed the trade balance fell into negative territory in October, with a deficit of NZ$23 million from a surplus of NZ$13 million in September. Seasonally adjusted exports (down 1.3%) fell more than imports (down 0.1%) over the month.
See Bernard Hickey’s commentary on the export and import figures on YouTube here, and on our video page here.
“The value of both merchandise imports and exports fell in October 2009 compared with October 2008, down 28.3% and 22.4%, respectively. Imports and exports are showing sustained declines from the high 2008 levels.”
“The import and export trends (which remove seasonal and irregular fluctuations) have continued to decline since peaking in the latter half of 2008. The imports trend has fallen 25.3% since August 2008, the longest period of decline and the largest fall in this trend since the series began in 1988.”
“Most import commodity categories contributed to the NZ$1.4 billion fall in import values. The largest contribution came from petroleum and products (down NZ$432 million or 49.3%), led by crude oil, mainly due to lower prices. Mechanical machinery and equipment was the next largest decrease, with falls across most commodities.”
“Similarly, most export commodity categories contributed to the NZ$859 million decline in export values in October 2009. Exports of milk powder, butter, and cheese were the largest contributor to the decline, down NZ$318 million (32.0%) from last year’s high levels. This decrease occurred despite quantities exported being the second highest on record (behind May 2009), and 30.9% higher than October 2008.”
ASB economist Jane Turner said looking ahead, the trade balance is unlikely to hold onto its gains from the past year with import demand stabilising and the export outlook remaining subdued:
Over the past year smaller than usual trade deficits and a string of surpluses have helped drive a sharp improvement in the annual trade balance. The smaller trade gap has helped to underpin some of the improvement in the current account deficit.
However, looking ahead the trade balance is unlikely to hold onto its gains. Import demand has now stabilised and volumes are likely to soon recover in line with domestic demand. Meanwhile, the export outlook remains subdued with the high NZD hampering exporter’s ability to remain competitive. Exporters in American and European markets will face challenging times contending with the strong NZD and weak demand in these markets.
However, some offset will come from exports to Australia, benefiting from strong Australian domestic demand coupled with a favourable cross exchange rate.
Tags: Exports, Imports, NZ dollar, Trade Balance
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November 27th, 2009 at 11:04 am
Its not on the press release but the tables show the year deficit has dropped from 5,269b in Oct 2008 to 1,164b in Oct 2009 – the best Oct yr since 2002
November 27th, 2009 at 11:22 am
The Countries on the other side of this gotta be hurting. The exporting power houses of Asia cannot escape this trend, in the indebted western economies.
November 27th, 2009 at 11:57 am
I see the average export price for milk powders has fallen even further to NZD 2,908 per tonne. Anyone want to believe in a $6.05 milk solids payout based on the season’s first 3 months export values?
For some reason the stats are stating zero as the value of dairy exports to China in October which is simply not credible.
November 27th, 2009 at 1:35 pm
PeterR Says:
November 27th, 2009 at 11:57 am
I see the average export price for milk powders has fallen even further to NZD 2,908 per tonne. Anyone want to believe in a $6.05 milk solids payout based on the season’s first 3 months export values?
They have raised a lot of capital when they issued bonds not that long ago, so they can topup the payouts from that. However I don;t think that is sustainable.
November 27th, 2009 at 4:43 pm
Looks like a lot of consumers, retailers and wholesalers and exporters are still hurting out there.
November 27th, 2009 at 7:22 pm
Be interesting on the 22 Dec 09 – Balance of Payments and International Investment Position: September 2009 quarter – the trade imbalance has been around 25% of the imbalance.
Pain is widespread and a long way from past, NZ has not dodged a bullet.
November 28th, 2009 at 1:16 pm
@rob: Check out Fonterra’s debt, its ugly IMHO. The crazy thing is to me you take on debt to use as capital to expand your business to give the income to payback the sum plus interest….My understanding was Fonterra was using this to keep going and not even paydown its huge debt….to me that does not seem a sound decision….so payouts from this? they could do but that just delays future pain…Paying un-realistic dividends out while carrying huge debt seems dodgy…I read a piece commenting that the idea is if you cant get the shareholders/voters to do what you want up front the classic back door is to paint the company/country into a corner and force in the changes you want as that’s the only option left…I think Bush was trying to do this with America, I suspect Key and National are doing the same thing, and it wouldnt surprise me if Boards do the same thing to quasi-private companies that have effective controlling shareholders, eg Fonterra.
@David Hillary: Indeed, I just wandered around DSE (first time in 4~6months), 40inch LCD TVs comfortably below $2000 for good brands….Ditto Noel Leeming (plus we just had a cost +10% offer from them). Farmers seem to just about have a permanent 20%+ off sales…and this is before Xmas…..Harvey Normal 40months interest free deals….the shops look qt though and food is up, power is up I wonder just what Xmas and the boxing day sales will be doing in retail land will anybody be spending or is it going to be dead.
@John Walley: Indeed I dont think NZ has taken a substantial hit…YET.
November 29th, 2009 at 11:56 am
This is why NZ’rs have problems with money…even their own.
Just one example.
See below sales PITCH training.
It begins….
Cash customers WILL finance
When it comes to converting cash buyers to dealership financing, follow the customer’s lead – says Australian auto business trainer, Alan Thomas
Cash customers are the bane of virtually every business manager. The typical cash buyer is in his or her 50s or 60s, has plenty of cash, and doesn’t need to finance their new vehicle.
They’ve experienced every sales pitch ever invented and can smell commission breath a mile away.
That tired old word-track might work on an 18-year-old, first-time buyer, but it won’t with a 65-year-old, last-time buyer.
These customers have heard it before, and they-don’t want to listen to it again. They just want to write a cheque and take their new car home.
The problem with “pitching” financing or any product to a cash buyer is they immediately recognise you are trying to sell them, not help them. So they turn off, tune out, and you’re left without a sale.
Statistics show, fairly consistently, over the last ten years that only 7 – 8% of the population actually do pay cash, so the good news is that 92 – 93% finance. However, it is still possible to convert cash customers. Let’s examine a few facts:
Don’t try and convert first
The most common mistake business managers make when it comes to cash buyers is attempting to convert them to dealership financing as soon as they discover the customer intends to pay cash for his or her vehicle.
This is absolutely the WORST thing you can do with a cash buyer!
Of all the products we have available in the F&I office (and financing IS a product; that’s what the F stands for in F&I), financing is the one product a cash buyer doesn’t want, and doesn’t think he or she needs. Financing should be the last product we try to sell a cash buyer, not the first.
That doesn’t mean we won’t discuss the benefits of dealership financing. We will. But asking a cash customer, “why do you want to pay cash?” immediately puts them on the defensive, and virtually guarantees we won’t finance them or sell them any products.
The option of financing should be presented on the menu, just like every other option. Otherwise, we kill our credibility. Once you try to sell a cash buyer the one product they don’t want and don’t think they need, their defences come up, and again, you won’t sell them anything.
‘Needs’ discovery
Needs discovery is the foundation upon which we must build the sale of every product, including financing.
Whether or not you’re able to convince a cash buyer to finance his or her new car depends on discovering why he or she needs to finance. We discover customer needs by examining the buyer’s order, and by asking open-ended questions.
It’s also important to compliment the customer on his or her financial acumen prior to asking any open-ended questions.
Keep in mind that cash customers won’t finance through the dealership just because we want them to. In fact, sometimes they won’t finance even when they can borrow money for less than they’re earning on their investments.
We have to discover a need that financing will fill, or a problem it will solve, so there is basis for our discussion of financing with the customer. In order to do that, you have to utilise open-ended questions that will enable you and the customer to answer that all-important question: “How will financing help this customer?”
Offer finance on a menu
Presenting a menu to cash buyers that includes the availability of dealership financing allows every customer to make a well-informed decision about the various products (including financing) available.
Like any other form presented to the customer, a proper introduction and explanation are critical.
Now instead of “pitching” financing or any product, we’re simply reviewing the options available in connection with their purchase.
Customers want to know what their options are. They just don’t want to feel like somebody is trying to” sell” them something they don’t want and don’t think they need.
Follow the customer’s lead
After presenting the customer’s options on the menu, it’s important that we follow his or her lead by first discussing those products he or she is interested in.
If the customer indicates that he or she is not interested in any product, always start with the product he or she needs the most, not the one you make the most money on. So financing may be third or fourth product you talk about.
After your initial needs discovery, you should have several good reasons why the customer needs all of your products, including financing. The key is to make the customer want to know more about the benefits of financing vs. paying cash, so we’re responding to the customer’s request for information vs. making a sales pitch.
We do that by making a statement that piques the customer’s curiosity and makes him or her thirsty to know more. That way, we’re helping the customer, not selling the customer.
Create customer interest in financing
Creating interest in dealership financing is the key to converting a cash customer. It’s critical the customer wants to hear what you have to say, as opposed to forcing him or her to listen to what you have to say.
A middle-aged couple paying cash often presents the perfect scenario for a cash conversion.
After you have discussed any other F&I products they might be interested in, it’s time to help your customer see the benefits of dealership financing. You can pique their interest by talking about the three assets he or she can leave your dealership with, if they choose to finance.
When your customer wants to know what those assets are (i.e., car, cash and established credit), it’s time to demonstrate how financing will benefit them.
The benefits of financing
Every customer has unique needs. The challenge with cash customers, as with any customer and any product, is to demonstrate how financing through the dealership will benefit them.
If a couple pay cash for their car, they leave with one asset: a car that’s paid for.
However, if they finance their purchase, they leave with three assets: the car, the cash, and the current credit established in both names. More importantly, should either of them pass away, their spouse will inherit four assets:
* The car that’s now paid in full with credit life insurance.
* The cash they didn’t spend.
* The interest earned on the cash they didn’t spend.
* A credit rating through a nationwide lender should they ever need a loan in the future?
To convert cash customers, you must help them see how they might benefit from financing. Even cash customers recognise the importance of a good credit score. And as a financial services professional, your responsibility is to use their past to help them make informed decisions about their future.
Whether it’s leaving additional assets to a surviving spouse, establishing or re-establishing credit, or keeping their cash available for a future business opportunity, you must be able to demonstrate how financing through the dealership will help them.
If there is no benefit to your customers, there is no reason for them to finance their purchase.
Cash buyers will see the benefit of-dealership financing if you don’t try and convert them first, discover their needs, and offer financing as an option on the menu.
If you then follow the customer’s lead, create interest in financing vs. paying cash, and remember to communicate end-results benefits, he or she will finance. As with any product, it still comes down to asking: “How will financing help this customer?”
Once you communicate how financing will help them, they will finance.
Alan Thomas is a director of Fusion Business Solutions and runs the training division of the Automotive Business College – http://www.automotivebusinesscollege.com
November 29th, 2009 at 12:14 pm
And the other. Why NZ creates suckers from overseas buyers. No price, so they can take advantage of idiots. Also the Seller pays for the advertising. NO sale, still paid for the AGENTs listings.
The Auction Advantage
The auction option has fast become one of the most preferred marketing strategies for clients – with good reason. A positive statistical sales rate togetherwith property being on the market for such a short time (on average less than 30 days) have many regarding auctions as the most successful ‘non-price’ method of selling.
AUCTION = ACTION
The auction is designed to attract genuinely interested, cash-in-hand buyers. These buyers are focused only on establishing the maximum price they are prepared to pay – not how low their offer should be. As motivation on the big day is often bolstered by emotional commitments towards purchasing this also strengthens the natural form of competition between buyers. The afore-mentioned ‘maximum price’ is also often open to interpretation in the mind of the buyer. The buyer’s fear that they have undervalued the property, and amy lose out, often means that they will stray past their limit. Bidding for a house is action- packed – and that’s all in your favour.
The auction is also the least disruptive and intrusive method. Your home home only needs to be opened at times that suit best and you remain in total control of the whole process. With assistance fromyour Harcourts consultant you’ll set the terms, conditions and auction deadline.
The undisclosed minimum reserve price is set – one you’re completely comfortable with. With your valued input, a professional marketing plan will be put inplace to ensure your property gains the maximum profile within the first few weeks of market exposure. With all this in place the excitement of the big day sometimes never eventuates. That’s because you always have the option to accept offers prior to auction.
The equation is simple. The Auction works.
EASY-TO-SEE ADVANTAGES
- A confidential reserve price. This remains undisclosed so your property cannot be sold for less than you are prepared to accept.
- An intensive, high profile auction marketing programme. This is designed to take full advantage of the high level of interest a property attracts during the initial period when it is first introduced onto the market.
- Finding the true ‘cash’ buyer. Auction effectively filters out those who cannot realistically make a cash purchase decision.
BUYER COMPETITION
While a price-marketed property offers buyers the opportunity to negotiate the purchase price, at auction they will be competing directly against other buyers. The purchase price is often a secondary issue compared with individual wants and needs, egos and emotions….. and the competitive will win.
Our commitment is to keep you totally informed throughout all stages of the auction marketing programme. Together we will work towards achieving the best possible result.
BEFORE THE CAMPAIGN….
You’ll recieve a copy of your advertising schedule. An information sheetcontaining all the relevant facts and figures will be made available to interested buyers. Your Harcourts auction team will also suggest ways in which your property can be presented to the market. It will also be featured in full colour on our website.
During the Campaign……
We conduct extensive database mailing and present and discuss with you a written weekly report on all marketing progress and sales strategy. All offers made on your property are presented for your consideration. Prior to the auction itself your Harcourts auction team will meet with you to help with the reserve price and discuss the auction procedure.
-Harcourts auctions achieve the highest price.
-Harcourts auctions achieve the highest success.
- Auction properties are on the market the shortest time – less than 30 days on average.
-You set the conditions and are in complete control.
- An auction date adds urgency and offers the buyer a reason to act.
- Cash sale – no subject to finance uncertainty.
-Deposit payable on the day of sale.
- Buyer competing against buyer – not buyer negotiating against seller.
November 29th, 2009 at 12:15 pm
Sore-Loser : I had the local HRV ( heat transfer ) rep . visit me last week . And it was pathetic to have the hackneyed sales-tactics tried on me . The ” if you don’t sign up now , you’ll miss an opprtunity , our prices are set to escalate soon “. The endorsements from some right charlies in Greymouth who ” signed up on the spot , they knew value for money “. The inference that if I don’t get their system immediately , my house will rot and fall apart ( the old dear is 80 + years , heart of rimu , solid as a rock ! ) . Orders were backing up by the thousands , if I didn’t sign up immediately , my unit wouldn’t be installed for eternity ………. Yadda yadda . I signed up with NZ Consumer magizine instead . Did my own research . Saved me alot of moola . Then got two big DeLonghi dehumidifiers , cheap , off the TradeMe . They cost $ 220 together . The HRV systems was vaguely priced at $ 3500 . Caveat emptor , folks ! ……………… If in doubt , send the prat away , get on your computer , and Google yourself into some knowledge and savings .
November 29th, 2009 at 2:46 pm
Roger…Roger…
For my sins, I took a sales training course once. Was educational…if not how they intended.
Was all by the BOOK and pat answers to the usual questions PRINTED out for the guys to learn. Like these examples above.
There is no end to the idiot pater.
They learn it by rote and as per my rant MANTRA, would you TRUST these lot with YOUR money. (See I have stock answers too for everything).
All junk, made in CHINA for peanuts and huge mark-ups on them. One year guarantee. If you are lucky. Built in obsolescence.
My personal THEORY is, if I never needed one for 30 years, why do I need this one now.
The worst were the old TIME-SHARE sales people.
Now it is prevalent here in every facet of life. EVEN KIWI SAVER, KIWI HOSPITALITY, Destiny…I suppose….they all learn by rote to get along side the CUSTOMER and then stick the knife in.
Will that be cash or charge.? Yeah Right
Pity, they are what got us into this mess. Plausible LIARS for the most part, sent out by ROBBER BARONS.
Like a POLLY..and the “Prayers for sale” lot……can SPIN on a DIME…..tell a pack of untruths…and make you SMILE……while stealing your wallet……..but not so far..MINE.
Greed sells too, same manner… even the BANKS did it to each OTHER. No wonder we are in the S–t.
The Global problems were all caused by most people, scamming each other in one form or another with NOTHING of value to be gained. Capital Gain……in deed, if not in FACT.
Ask BECKHAM. …and DUBAI…where the loot….went. …it was LOOTED.
A house of cards.
Buyer BEWARE…You have to learn the catch…..not get caught with yer pants down.
Same with VOTING in the current lot. Smiling all the way to the BANK.
Wakey Wakey NZ.
.
November 29th, 2009 at 3:01 pm
As the years roll on , I have found some new friends , Sore-Loser , friends who enlighten me , and who can save me alot of money : Google / TradeMe / Amazon.com / NZ Consumer mag / and the gang at ” interest.co.nz “. Prat salesmen don’t have a chance up against that lot . I don’t have a time-share . Nor a 36 m sq. apartment in Auckland . No truffle farm . No money in ” mezzanine ” financing . A little knowledge serves you well , my friend . One thing above all , I am most proud of , no mortgage .
November 29th, 2009 at 4:23 pm
Me too. Same deal. Same Mantra, same credo.
Most people working to pay the bills they never needed in the first place.
Mortgage free at 31, I hated paying 17% to ANYONE, even for a year. Today is piffle rates, but way over priced CRAP as a general rule. Most people have been sold a PUP…and it is pregnant with cross-breeds and bitches…. if ya get my drift.
Would have been earlier, I put most early income into a business.
Tripled the turnover in that in 3-4 years HARD GRAFT.
No holidays or JUNKETS to PARIS or HAWAII…or anywhere on SOME ONE ELSE’S MONEY, like these POLLIES do. Useless idiots.
GRAFT is a four letter word called work to the layabouts in PARLIAMENT and the rest of the 1.7 million taking from the WORKERS.
Their kind of GRAFT is a different kettle of PORK.
I sold that business to an ACCOUNTANT, who sold it at a loss to a BANK MANAGER who CLOSED it.
It taught me a lot about IDIOTS in FINANCE and never being beholden to ANYONE.
Need I say more.
November 29th, 2009 at 5:14 pm
Sore- Loser/ Rogie,
One of NZ bad mentality is: “Bank- shopping” even before starting up life or/ and business and working hard to make money – without the dependency of lending.
November 29th, 2009 at 5:20 pm
True , Walter . I purchased my first house in my 40’s . Up until then I was unmarried , and all savings in productive assets . But the new wife insisted on a house . And I struggled since then . Now free of my Australian bank friends . Sweet fare-well , to our weekly sob-fests , as I hand over the interest monies . No more……………..Yippppppppeeeeeeeeeee , the gummy bears are on me , team !