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More gloomy figures are out about the New Zealand economy which continue to break records of the wrong kind.
The latest out on Friday show the first annual decline in gross domestic product in 17 years and the cut was bigger than expected.
We are in the middle of the largest global recession in living memory and it is being felt right in our backyard, especially in car yards.
"There's no doubt about it.. times have been very challenging," says Greg Shackel of Shackel motors.
Car sales have taken a big hit in the past three months, with imports down almost 50%.
"There's definitely been a large increase in the closure of the
yards in the past 12 months.. in fact the yard we're in now was
closed down maybe four months ago. Hence we've just taken it over,"
says Shackel.
Imports are pulling down gross domestic product, a measure of the
economy's output.
The GDP is down 1% on last year the first annual drop since 1992.
"We've been in recession for five consecutive quarters and it's certainly the longest since the 1970s," says Khoon Goh, ANZ National economist.
"Again it's quite unfortunate that 2008 was largely a homegrown recession with droughts and as we were coming out of that we were hit by the global recession. And that's got consumers watching their bank balances. Household spending's down especially on big ticket items like furniture and electronics."
Manufacturing is the biggest contributor to the downward slide,
falling 7.2% in the three months to March. Companies like Windsor
Engineering have been forced to tighten their belts.
"We would be down about 27-30% on just sales turnover, and that's
big numbers. And we've had to adjust to that and that's been
painful within the company. We've had to make some decisions, but
we see it picking up," says Keith Robertson of Windsor
Engineering.
But the Prime Minister is remaining positive.
We've had very tumultuous time internationally. Hopefully the data will start improving from here, but it shows you that the government has to remain absolutely resolutely focussed on making our economy more competitive, says John Key.
Economists are predicting more hard times though before things pick up later this year.
New Zealand, which is looking at an export-led recovery for its economy, is also battling a stronger than desired Kiwi dollar, which has been trading in the 62-64 US cent range over the last couple of weeks.
The dollar responded to the data by falling about half a cent to 64.12 US cents.
ASB Bank chief economist Nick Tuffley says the latest GDP data may prompt the Reserve Bank cut the official cash rate later in the year "to fight the general tightening in monetary conditions".
However, RBC Capital markets senior economist Su-Lin Ong believes there is little the government of the Reserve can do, saying policy is "pretty much exhausted since rates can't much lower than Australia's".
