Slowdown expected

Press, 24 October 1989, Page 26

Slowdown expected

PA Wellington A slump in orders for cars and food in August points to a slower economic recovery in the second half of this year, economists say. The slowdown was expected because of the artificial boost to consumer trading before the July increase in GST. It is shown in the drop in car orders. Sales had boomed between a cut in excise duty in March and before GST was increased in July, but have now fallen off. But a drop in food imports has puzzled analysts. Early stocking up of imports appears to have been a factor. According to a Statistics Department spokesman, one importer said he had filled his orders for the year and intended running orders down. Statistics Department figures, removing seasonal influences, showed total orders for non-fuel imports fell 12.3 per cent in August compared with July. When adjusted for long-term trends, orders rose 1.5%, but this was down on the 2% growth shown in April, May, June and July. Unadjusted figures showed orders fell $31.9 million to 5334.9 M. Transport equipment orders, mostly new cars, fell $39.8M to 585.2 M after three buoyant months above SIIOM. Orders for food, beverage, tobacco and live animals fell to a 10-month low of 516.4 M to $22.9M. An encouraging feature was a $12.9M increase, to $44.1M in orders for iron, steel and nonferrous metals — raw materials for construction and manufacturing. There was a 7% rise to $57.5M in orders for chemicals, a category which includes fertilisers. This augured well for the fanning recovery, economists said. .