New Zealand has had a really wild start to the year with flooding, cyclones and unpredictable LME quotations.
There is still significant infrastructure damage to areas of the country as a result of these floods and cyclones. While this did not greatly impact consumer or merchant yards by all accounts, access to some areas was cut off.
There has been persistent inflationary pressure, with New Zealand’s official cash rate moving up another 50 basis points to 4.75% in late February. The labour market remains very tight and the supply chain is still under pressure into some offshore markets, although this situation is gradually improving.
New Zealand is still modelling a recession for the second half of this year, but at least local consumers are still buying in the current market and volumes are good in line with financial year-end clearances for many companies.
Australia’s official cash rate is now 3.6% - an increase of 25 points since February and of 50 points since last December. GDP is forecast to be approximately half of 2022 levels, but it is not anticipated that the economy will move into recession.
Merchants are reporting reasonable volumes in the market at present as well as easier conditions for shipping to traditional export outlets. Local consumers are continuing to buy in the current market.