While there are a range of factors that account for this, an important one is the higher exchange rate which has increased the price of domestically produced goods relative to world prices. As a result, in a number of the affected sectors, employment growth has been relatively slow.
Conditions have also been subdued recently in the retail and wholesale sectors, largely reflecting consumers’ more cautious approach to spending. Graph 13  10  BIS central bankers’ speeches  These various shifts in the economy are occurring at a time where there is little overall spare capacity. This is quite different to the situation prevailing over most of the past 40 years.