The result is increased competition to meet the needs of consumers and producers and downward pressure on both input and output prices. The new digital channels are significantly altering the competitive landscape in some sectors, particularly in traditional sheltered markets where producers are being newly exposed to competition from online providers.
These three significant global factors have contributed to a negative inflation trend for the prices of imports and other tradable goods in New Zealand over the past decade. Commodity prices have added a cyclical component to the trend (figure 7). These global factors have also contributed to reduced inflation in “non-traded” sectors which have become increasingly exposed to competitive pressures.