Business & Investing: March exports down $134m from a year ago, Plus analyst expects property market to cool this year

Imports last month were the highest ever for a March month, despite a fall in crude oil imports.

While the value of crude oil imports fell $399 million, overall, imports for March rose $559 million from the previous March to $5.6 billion.

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The increase in imports was driven by a range of commodities, with large movements in vehicles, parts, and accessories (up $190 million), mechanical machinery and equipment (up $127 million), textiles and textile articles (up $125 million), and electrical machinery and equipment (up $115 million).

The value of crude oil imports totalled $72 million, down $399 million from the same period last year. The fall in crude oil imports was mainly due to an 80 percent fall in the volume imported. The unit price for crude oil was also down 26 percent from the same month last year.

Total imports of textiles and textile articles were the highest ever, with most of the increase coming from knitted jerseys and cardigans from China.

Total exports were $5.7 billion for March, down $134 million from the same period last year.

The main driver was an $87 million fall in preparations of milk, cereals, flour, and starch (mostly infant formula), with exports to China accounting for more than half the fall.

Meat exports were also down, falling by $73 million to $927 million, after a record month last year. However, meat exports to China reached the highest monthly total ever, up $127 million or 42 percent.

The value of log exports rose $174 million (84 percent) from the same period last year due to rises in both the volume of logs exported (up 57 percent) and the unit price (up 17 percent).

Job market remains buoyant in March

Filled jobs numbers rose 0.5 percent in March to 2.2 million, driven by a 2.2 percent boost in goods-producing industries according to monthly employment indicators from Statistics NZ .

Earnings have also risen up 7.2 percent over the three months to March 2021, the fastest pace in a year.

Service sector employment rose 0.2 percent – the first annual rise in five months, with seasonally adjusted jobs numbers now above pre-pandemic levels.

Wellington and Waikato job numbers lifted further in March, up over 4,000 roles compared to last March. Stronger hiring in Auckland post Level 3 in February has seen its job losses slashed from -4,400 in February to just -480 in March.

Canterbury has seen the first annual rise in jobs numbers since October 2020, after seeing annual falls of around 2,000 jobs per month recently.

Infometrics economist Brad Olsen said after a weaker period in February, job numbers have bounced back stronger in March and shrugged off most of the declines from Auckland’s two brief stints at Alert Level 3.

“There are some signs of construction sector activity being constrained from too much further growth, with jobs growth in construction holding steadier in the last few months – a view consistent with what we’re hearing from the sector.”

Z Energy shares lift ahead of its full year result next week

Out of favour fuel retailer Z Energy led the NZ market higher yesterday following a ‘buy’ recommendation from broking firm Jarden.

The shares closed up 3.5 percent at $2.63.

The company will report its full year result next Thursday

Jarden are forecasting full year earnings of $243m at the high end of Z Energy’s guidance range, while rival broker Forsyth Barr are expecting earnings to come in at the lower end of the guidance at $237m.

Z Energy shares have significantly underperformed the market this year and are down 25 percent from their $3.42 peak in early December.

However, the current share price is a far cry from 2016 when they traded above $8.00.

Infratil to acquire a majority stake in Pacific Radiology

Infratil has announced plans to buy a majority stake in Pacific Radiology for up to $350 million from its existing doctor owners.

Pacific Radiology is the largest private diagnostic imaging service provider in New Zealand, operating 46 clinics in the South Island and lower North Island and employing 90 radiologists.

Infratil will acquire between 50.1 percent and 60 percent of Pacific Radiology, conditional on counterparty consents to change of control in relation to a small number of material contracts. Assuming those consents are given, it expects the transaction to settle by May 31.

The existing doctor shareholders and management will hold a minority interest in the company while Infratil will have governance rights consistent with its shareholding.

Infratil said the latest acquisition provided an opportunity to scale its investment in Qscan Group, a leading diagnostic imaging business in Australia, and create a meaningful Australasian healthcare platform with potential synergies and adjacent opportunities.

Infratil shares closed up 0.7 percent at $7.05.

Corelogic expects property market to cool this year but says listings could rise

Property data company CoreLogic expects the total number of residential property sales to be lower this year than it was last year, as the market begins to cool.

It also says speculation about sharp increases in residential rents and a mass exodus of investors from the market following changes to tax rules announced by the Government last month is probably unfounded.

CoreLogic’s Property Market Update for the first quarter of this year said a recent feature of the market was a shortage of listings but this could change.

“Theory would tell you that listings may start to rise over the coming months as more would-be sellers (e.g. investors) react to previous strong capital gains and look to lock in their profits,” the report said.

CoreLogic’s chief property economist Kelvin Davidson said speculation about rents increasing and investors racing to sell rental properties is also unlikely.

The report forecasts the rate of new mortgage lending is likely to slow.

New York Times speculates Allbirds planning Nasdaq listing

Growing media speculation that Allbirds, the New Zealand-born San Francisco-based shoe brand, is readying itself for a Nasdaq listing will be welcome news for local investors keen to grab a slice of the action.

The New York Times has reported the US-registered company, founded in 2016 by ex-All White Tim Brown and US business partner Joey Zwillinger, is in the process of interviewing banks in the lead up to an initial public offering.

A current market valuation had not been offered, though it was last valued at US$1.7 billion (NZ$2.3b) in October.

The brand has become popular in the US, particularly in Silicon Valley, home to tech giants such as Google and Facebook, where its shoes are almost as ubiquitous as Teslas.

Allbirds now has several retail stores internationally, including in Auckland’s Britomart, and can name stars such as Leonardo DiCaprio as investors.

Former US president Barack Obama, actors Matthew McConaughey, Mila Kunis, and Ashton Kutcher have all been seen wearing Allbirds, helping the company to surge in popularity.

Allbirds is the second NZ-founded company in less than two months to prepare for a US IPO after Rocket Lab announced plans to merge with a special acquisition company (SPAC).

Victoria state government announces plans to construct a purpose built MIQ facility

Australia’s Victoria state government has confirmed plans for a purpose-built quarantine hub in Melbourne’s north and has called on the Federal government to pay for its construction.

The facility, detailed in an extensive report released yesterday, would be built next to an existing pet quarantine site in Mickleham, about 30 kilometres north of Melbourne’s CBD.

Subject to federal government approval, construction would begin in September.

Acting Premier James Merlino said the proposal had been given to the federal government with a request they pay for its construction and ultimately take ownership of the facility.

The existing quarantine facility and the adjacent land identified for the proposal are owned by the federal government.

The proposal is for the state’s COVID-19 Quarantine Victoria (CQV) body to run the operations at the site.

It is anticipated it would take four months to design and plan the facility, and a further four months to construct the accommodation with a capacity of up to 3,000 places (representing 1,100 returning international traveller arrivals per week), supported by hotel quarantine.

Apple & Facebook report solid quarterly earnings

Apple has reported a 54 percent jump in quarterly sales with each product category seeing double-digit growth. The company also said it would increase its dividend by 7 percent and authorized US$90 billion in share buybacks. Apple shares were up nearly 3 percent in pre-market trading.

Facebook’s revenue jumped 48 percent, driven by higher-priced ads. Facebook shares surged more than 7 percent in the premarket.

McDonalds in the US paying job seekers $50 just to turn up to an interview

So much for technology replacing jobs and employment slowing down post-Covid.

A growing chorus of complaints by US employers is getting louder as a shortage of labour threatens to slow the country’s soaring economic rebound.

Even as unemployment remains high and 8 million fewer Americans are in work than before Covid-19 struck, many employers are struggling to fill vacancies.

Earlier this month Bloomberg reported that Delta Air Lines was forced to cancel 100 flights due to a lack of workers, while a café in Florida has turned to robots to greet customers and deliver food.

And proving just how tight the labour market in the US has become, one McDonald’s owner has recently resorted to paying potential burger-flippers US$50 just to turn up for a job interview.

Recent data backs up these anecdotes. At the end of last year, 22 percent of manufacturing firms were operating below capacity because of a lack of workers, up from 16 percent the year before, according to a survey by the US Federal Reserve.

Total vacancies in the US are now running at their highest level for at least two decades indicating that businesses have plenty of unfilled positions.

And even accounting for changes in the composition of the workforce, wage growth at around 3 percent has been surprisingly robust, suggesting that firms are offering bigger pay packets to tempt workers. Economists warn this has the potential to fuel inflation, pushing up interest rates which would ultimately choke off the recovery.

Andrew Patterson is Newsroom's Markets Editor and has worked for decades as a financial journalist, radio presenter and editor with Australia's ABC, Radio Live and NBR.

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