New Zealand commodity export prices rose for a third consecutive month, driven by a weaker local currency and recovering global demand for dairy products [a1fc7122]. Prices in New Zealand dollars increased by 3.1% in October compared to September [a1fc7122]. The stability in milk, meat, and lumber prices could have a positive impact on New Zealand's cooling economy [a1fc7122]. However, dairy prices are still 17% lower than the previous year, despite a 5.9% increase from September [a1fc7122].
The impact of lower export prices on the New Zealand economy is raising concerns, particularly in the primary sector [1ce84744]. Rising mortgage payments are projected to have triple the effect of falling dairy payouts on the economy between 2022 and 2024 [1ce84744]. The lack of relief in interest rates, coupled with a weakening labor market, is causing further strain [1ce84744]. Other export sectors, such as meat and forestry, have also experienced price declines [1ce84744]. The depreciation of the New Zealand dollar has partially offset the impact on exporters' revenue, but receipts remain lower [1ce84744]. Horticulture, the only sector with higher prices, has also been affected by extreme weather events [1ce84744]. Inflation has squeezed household budgets and farm input costs have increased significantly [1ce84744]. These factors raise concerns about the prospects for agriculturally based provincial regions in the next few years, as lower export revenue and reduced spending by farmers are expected [1ce84744]. The downturn caused by weaker export prices may also contribute to an increase in the outflow of New Zealanders seeking better economic conditions abroad [1ce84744].
In Canada, the Bank of Canada's second-in-command expressed concerns about households accumulating significant amounts of long-term debt [a1fc7122]. The country's labor market also showed weak job gains and a rising unemployment rate [a1fc7122].
These developments in New Zealand's commodity prices and Canada's economic indicators have implications for the respective countries' economies and financial markets [a1fc7122].
