Wholesale Trade Survey: December 2009 quarter

All references to sales and stocks movements are to seasonally adjusted series unless otherwise stated.

Sales

Total wholesale trade sales rose 1.9 percent ($383 million) in the December 2009 quarter – the first increase since the June 2008 quarter. The decreases between the September 2008 and September 2009 quarters made this the most prolonged period of decline since the start of the series in March 1995.

Although more industries showed sales decreases than increases this quarter (nine went down and seven up) four industries had sales increases of more than $100 million, driving the overall sales rise. 

  

The largest increase this quarter was in motor vehicle wholesaling, up 10.9 percent ($140 million) – this industry’s biggest quarterly increase since June 2002. The latest result follows a fall of 5.9 percent ($81 million) in the September 2009 quarter. After achieving quarterly sales of around $1.7 billion during March 2007 to March 2008, the level of motor vehicle wholesaling has fallen to between $1.3 billion and $1.4 billion a quarter, similar to levels in 2001 and 2002.

The next largest increases this quarter were in:

• petroleum product wholesaling, up 8.5 percent ($139 million) (sales in this industry are not seasonally adjusted)
• builders' supplies wholesaling, up 6.7 percent ($109 million) – the biggest quarterly increase since June 2005, when sales rose 13.3 percent
• primary product food wholesaling, up 6.5 percent ($105 million) following an 8.6 percent fall in the September 2009 quarter
• farm, construction machinery, and professional business equipment wholesaling, up 4.0 percent ($68 million).

Of the industries with sales decreases this quarter the most noteworthy was machinery and equipment not elsewhere classified (nec), down 9.7 percent ($80 million). This industry includes a wide range of activities such as wholesaling air conditioning equipment, office furniture, paper-making, and woodworking machinery and equipment.

In the remaining 10 industries, two rose and eight fell less than $40 million.

 

Sales trend

Wholesale sales trend figures indicate a slight upwards movement during the September and December 2009 quarters, rising 1.5 percent. This follows a fall of 10.2 percent between the September 2008 and June 2009 quarters. Initial trend estimates may be revised and should be used with caution until more data points are available.

 

Industry sales trends that have been rising in recent quarters include:

• Food and grocery product wholesaling – this industry comprises about one fifth of total wholesale trade sales. The trend has been rising since March 2008, up 8.5 percent; between June and December 2008 the average quarterly rate of increase was 0.5 percent and rose to 1.7 percent during 2009.
• Petroleum product wholesaling – the trend fell 28.4 percent between December 2008 and June 2009, but since then has risen 11.3 percent.
• Builders’ supplies wholesaling – following its peak in the March 2008 quarter, the trend fell 13.3 percent during the five quarters June 2008 to June 2009. Since June 2009 the trend has risen 10.3 percent.
• Motor vehicle wholesaling – the trend reached a peak in the September 2007 quarter but by March 2009 had fallen 28.9 percent. Since March 2009 the trend has been rising, up 11.0 percent .
• Pharmaceutical and toiletry wholesaling – the trend has been generally rising since September 2001, never falling for longer than one quarter. The last fall was in the March 2009 quarter (down 1.2 percent). Since then the trend has risen 2.2 percent.

Collectively, these five industries account for just under half of total wholesale trade sales.

Trends have been flat or declining for at least four quarters in seven industries:

• Farm, construction machinery, and professional business equipment wholesaling – the trend has fallen 8.1 percent since December 2008, but now appears to have levelled off.
• Unprocessed primary products wholesaling – the trend showed strong growth during 2007 and most of 2008. Since September 2008 the trend has fallen 13.7 percent, although the rate of decline appears to be easing.
• Electrical and electronic equipment wholesaling nec – generally falling since June 2008, down 15.5 percent.
• Machinery and equipment wholesaling nec – down 25.9 percent since March 2008; it is at its lowest level since the March 2003 quarter.
• Household good wholesaling – down 9.3 percent since December 2008.
• Books and paper product wholesaling – down 14.2 percent since December 2008; the rate of decline appears to be easing.
• Chemical wholesaling – down 17.8 percent since September 2008; now at its lowest level since September 2004.

These seven industries account for about one third of total wholesale trade sales.

Stocks

Total wholesale trade stocks were flat, down just 0.1 percent ($11 million) in the December 2009 quarter, after four quarters of large decreases.

Stocks decreased in 11 of the 16 industries and increased in five. The largest decreases were in:

• farm, construction machinery, and professional and business equipment wholesaling, down 7.8 percent ($87 million)
• motor vehicle wholesaling, down 6.3 percent ($74 million)
• petroleum product wholesaling, down 4.9 percent ($58 million).

These three series are not seasonally adjusted as they do not exhibit reliable seasonal patterns.

The biggest increase in stocks this quarter was in food and grocery products wholesaling, up 6.4 percent ($60 million). Other increases were less than $20 million for each industry.

Revisions

There were no revisions in the December 2009 quarter.

Measurement errors

All statistical estimates are subject to measurement errors. These include both sample errors and non-sample errors. In addition, the survey applies imputation methodologies to cope with small firms and non-response. These measurement errors should be considered when analysing the results from the survey. For more information on measurement errors, please refer to the 'Technical notes' section.

Sample errors

The postal survey was designed to give statistics at the following levels of accuracy (at the 95 percent confidence interval):

• 5 percent for operating income and stocks at the total wholesale trade level
• 10 percent for operating income and stocks at the published industry level.

This means, for example, that there is a 95 percent chance that the true value of total wholesale trade operating income lies within 5 percent of the published estimate.

At the industry level, the following sample errors were recorded in the December 2009 quarter at the 95 percent confidence interval limit.

Imputation

Small firms

Small to medium-sized firms are generally not surveyed. Their variables are instead modelled from administrative data (GST and EMS) sourced from Inland Revenue. Ratios calculated from the postal sample units are applied to the administrative data to provide an estimate of their variables.

Non-response imputation

Although every attempt is made to achieve a 100 percent response rate, in practice this does not occur. Values for non-responding businesses are estimated by a number of methods, including:

• regression imputation
• historic imputation
• mean imputation.

Regression imputation involves estimating the variable of interest from the unit's administrative data (GST sales), based on the relationship shown by similar businesses. Historic imputation involves multiplying their response in the previous period by a non-response factor. The non-response factor is the average movement over the quarter of similar businesses. Mean imputation involves estimating a value for a unit by using the average value for a set of similar businesses.

Postal response rate

The response rate describes the proportion of operating income that was provided by actual survey responses. Note that the calculation of this response rate relates only to data for the postal sample. The Wholesale Trade Survey has a target response rate of 85 percent. The response rate achieved for the December 2009 quarter was 93 percent.

For technical information contact: 
Chris Stephenson or Kathy Hicks
Christchurch 03 964 8700
Email: info@stats.govt.nz

Next release ...

Wholesale Trade Survey: March 2010 quarter will be released on 4 June 2010.