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New Zealand manufacturing sales increased the most since 2002 in the fourth quarter and home building surged, adding to signs economic growth accelerated in the final months of last year.

Sales volumes adjusted to remove inflation rose 3.1 percent from the previous three months, Statistics New Zealand said in a statement in Wellington today. Residential construction increased 7.4 percent in the same period, the statistics agency said in a separate report.

Stronger construction, manufacturing and retail sales suggest economic growth accelerated in the fourth quarter, buoyed by record-low interest rates and an expansion in Australia, which is the biggest market for New Zealand’s exports. The Treasury Department last week said the currency’s 3.7 percent decline against the U.S. dollar so far this year is providing more confidence for exporters.

“Construction and manufacturing look set to provide a positive contribution to gross domestic product in the quarter,” said Philip Borkin, an economist at Goldman Sachs JBWere Ltd. in Auckland. He estimates the economy grew 1 percent in the three months ended Dec. 31.

New Zealand’s dollar bought 70.01 U.S. cents at 11:55 a.m. in Wellington trading from 69.54 cents immediately before the reports were published.

Economic growth is accelerating after GDP increased 0.2 percent in both the second and third quarters of 2009, ending the nation’s worst recession in three decades. Fourth-quarter GDP figures are published on March 25.

Export Volumes

Economists will complete their GDP forecasts after a report on export and import volumes on March 10 and data on electricity generation due a week later. Retail sales rose 1 percent in the fourth quarter, according to a report on Feb. 12.

Reserve Bank Governor Alan Bollard has kept the official cash rate at 2.5 percent since April last year. He will leave the rate unchanged at his next review on March 11, according to all 13 economists surveyed by Bloomberg News.

Manufacturing sales rose in the three months through December by the most since the third quarter of 2002, when volumes jumped 4.1 percent. Eleven of 15 industries recorded gains, the statistics agency said.

Meat and dairy sales advanced 4.6 percent, led by meat. That offset a fall in milk powder, butter and cheese volumes. More than half the meat and dairy production is exported, the statistics agency said.

Excluding those categories, manufacturing climbed 3.6 percent, the agency said. Analysts use the figure excluding meat and dairy as a guide for the contribution of manufacturing to New Zealand’s GDP.

GDP Contribution

“Adjusting for changes in inventory levels, we estimate that manufacturing production rose around 4 percent” in the quarter, said Borkin. “This emphasizes a turn in performance after a period of significant weakness.”

Before the latest period, manufacturing had declined for five of seven quarters.

Demand for exports is being buoyed by global growth, led by China and other Asian economies. In Australia, which buys 23 percent of New Zealand exports, growth was 0.9 percent in the fourth quarter.

The increase in home construction followed two quarters of declines, while non-residential construction fell 6.1 percent, the statistics agency said in a second report.

“We expect residential construction activity will continue to recover over the coming quarters,” said Jane Turner, an economist at ASB Bank Ltd. in Auckland. “Non residential was significantly weaker than our expectation.”

Construction lags behind home-building approvals, which surged 21 percent in the fourth quarter from the three months through September, according to a report on Jan. 29.

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The Colorado Business Hall of Fame inducted eight business notables Thursday night during its annual induction banquet at the Hyatt Regency Denver at the Colorado Convention Center.

Junior Achievement-Rocky Mountain Inc. and the Denver Metro Chamber of Commerce operated the event, and UMB Bank was the underwriter.

The Colorado Business Hall of Fame is in its 21st year, and has more than 100 members.

The 2010 laureates:

• The Gart Brothers: Nathan, Melvin, Jerry and Mickey Gart — In 1928, Nathan Gart founded Gart Bros. Sporting Goods Co. Melvin Gart joined the business in 1946 and oversaw all the advertising.

Nathan’s two sons, Jerry and Mickey, also worked for the company. Jerry Gart joined full time in 1953. He also opened the first branch store — a camera store at 16th Street and Court Place in downtown Denver — and built it into the largest photographic outlet in the Rocky Mountain West.

He added sporting goods to the upper level and took charge of the business. Eventually, that led to a highly successful chain of sporting goods stores, including the Sportscastle at 10th Avenue and Broadway.

The Garts also came up with “Sniagrab” — bargains spelled backward — and turned it into the largest ski sale in the world. It starts every year during Labor Day weekend.

• James B. Wallace — He’s one of four partners of Bownlie, Wallace, Armstrong and Bander Exploration. After 17 years working in the oil business in Texas, Wallace and his associates moved the company to Denver in 1970. Soon, Joe Bander joined the partnership.

Brownlie, Wallace, Armstrong and Bander was active in the Rockies in the 1970s. In 1980, they formed BWAB Inc. and Brownlie, Wallace, Armstrong and Bander Exploration.

Wallace served on the board of directors of Tom Brown Inc. until its sale to EnCana Oil and Gas USA Inc. He currently serves on the boards of Delta Petroleum, Ellora Energy and Savant Resources.

The Denver Petroleum Club named him Man of the Year in 1981.

In 1986, the Independent Petroleum Association of the Mountain States named him Wildcatter of the Year, in recognition of his 30 years in oil and gas exploration.

The Colorado Petroleum Association named him Man of the Year in 1991, and the Rocky Mountain Oil & Gas Hall of Fame inducted him in 2004. He’s also a member of the All-American Wildcatters group and the 25-Year Club of the Petroleum Industry.

• Henry Bosco — His father owned the Denver Hotel in Glenwood Springs, and Henry Bosco worked at a variety of jobs there as he grew up.

In 1956, the owner of the Hot Springs property, Frank E. Kistler, decided to sell the property and retire. Bosco and his father, Mike, were two of the 22 investors who bought the property.

Bosco helped lobby for the location of Interstate 70's Eisenhower/Edwin Johnson Memorial Tunnel.

He served as general manager of the hot springs property from 1976-89. Today, he serves as president and board chairman.

The Glenwood Chamber Resort Association named Bosco Citizen of the Year in 2006. The Glenwood Chamber of Commerce has established the Bosco Tourism Business of the Year award, an annual award in honor of the Bosco family.

• Merle Catherine Chambers — In 1980, she founded and served as CEO of Axem Resources LLC, an independent oil and gas production firm. Chambers ran it for 17 years. She also became board chairman of Clipper Exxpress Co., a family-owned transportation business based in Illinois. Her father, Jerry Chambers, started that company.

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Today, Norty Cohen opens Buzz-hound Learning Lab in Maplewood, sharing space with Hatch, a focus group and research facility. Among its initial offerings, Buzzhound will offer classes on search engine optimization, the process of improving a website so it ranks higher in search engine results.

Cohen says he sees a strong market for the 10-member classes (prices range from $600 to $700 per person) at a time when there is so much emphasis on reaching customers through the Internet — particularly when research suggests it is critical to rank high in search results. By some estimates, 65 percent of all searchers will go to the first 10 sites they see.

It seems like we hear a lot these days about search engine optimization. Why is that?

There are 100 billion searches a month online. More and more people are using their cell phones to search and that’s where people are finding customers and businesses.

Even though Yellow Pages is still a $16 billion-a-year business, where everything is going is search. If you are in business or if you are in marketing, you need to understand search.

What is the most important thing one needs to know about SEO? And are there any big no-nos?

You need to understand how and why people are coming to your site. And how and what you need to do to improve your content. And to make more opportunities for people to find you online.

… There are people who will say that you can’t fool the search engine, that you can’t do this thing called black hat, where you put in some things that may not be true. I think the biggest no-no is not doing anything and assuming people are going to find you.

You have this lab set to open today low interest rate personal loans. What sort of response are you expecting?

We’ve had several major corporations commit to sending people to the classes. We tried to price it so that it’s incredibly reasonable, while at the same time, there is a ton of information that happens in one day.

There are two instructors, so it is a five-to-one student-teacher ratio. These people are experts much more than myself. Several major corporations have committed to sending several people, and that’s just in our first couple of announcements. We’re really going to start much more heavily marketing next week.

What prompted you to open Buzz-hound?

I’ve been trying to learn this subject for some time. And I found it to be incredibly hard. It was hard to follow webinars. It was hard to follow books. It was sort of like an advanced math problem that you just needed someone to show you how to do it.

And once you got into understanding it, it became very basic. And I realized we could create a business that could truly teach people how to help their businesses.

You’ve said you don’t think this is the sort of thing that can be taught or learned online. Why is that?

Search engine optimization is a language. It’s just like learning any other language. Someone has to show you and speak it for you so you can hear them.

If you go into the lab and you try the programs and the instructor shows you how to use them, it becomes very natural to you. But it’s the whole sort of foreign language aspect to it that makes it difficult to learn.

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As the first decade of the 21st century comes to a close, the Denver Business Journal is revisiting some of the biggest business-news stories of the last 10 years.

Here, we look at Joseph Nacchio, the one-time hard-charging CEO of Qwest Communications International Inc. who is now serving a prison term following his 2007 conviction on 19 felony counts related to insider trading.

The story: Nacchio was an AT&T executive when Qwest — a telecom founded by Denver billionaire Philip Anschutz — named him CEO in 1996. He was granted millions of shares of Qwest stock in 1997.

In 2000, under Nacchio’s leadership, Qwest acquire the baby Bell U S West and became of the nation’s largest phone companies.

In 2001, Nacchio began selling off his shares before a write-down pushed the stock price downward. In August 2001, a class-action lawsuit was filed in federal court, accusing Nacchio and others of issuing "false and misleading" statements about the company’s financial state that had kept the stock price artificially high. Later, the Securities and Exchange Commission and the Justice Department launched probes.

In June 2002, after Qwest stock cratered, Nacchio resigned, and the company later was forced to restate three years’ worth of earnings.

Nacchio was indicted on 42 insider-trading counts in December 2005. His federal-court trial in March 2007 garnered worldwide attention.

Following his conviction and a string of unsuccessful appeals all the way to the U.S. Supreme Court, Nacchio reported to prison in Pennsylvania in April of this year.

Today: Nacchio remains behind bars while he awaits a resentencing on his original conviction, a date for which has not been set.

Click here for a roundup of DBJ coverage of this key story of the decade.

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Greek Finance Minister George Papaconstantinou began the week with his office protected by baton-wielding riot police taming student protests. Now, investors have him under siege as the country’s bonds tumble.

“Things are difficult, there’s no question about it,” he said in an interview yesterday in his office overlooking Syntagma Square, the hub of downtown Athens. “It’s a very hard fiscal situation. It’s not one that’s not reversible.”

Papaconstantinou, 48, has spent much of the past week reassuring investors and European leaders that Greece won’t default on its $350 billion in debt, its banks will keep access to European Central Bank financing and Prime Minister George Papandreou understands the worst fiscal crisis in 15 years.

Greek bonds plunged to their lowest in seven months on Dec. 9 and stocks slumped after Fitch Ratings cut Greece one step to BBB+, saying Papandreou’s two-month-old government isn’t doing enough to tame a deficit of 12.7 percent of output, the highest in the European Union. A day earlier, Standard & Poor’s put its A- rating on watch for downgrade.

The yield on Greece’s 2-year bond has surged 127 basis points to 3.15 percent this week, driving it above Turkey’s for the first time.

Situation ‘Severe’

“I spent two hours on the phone with the finance minister a couple of days ago, and he understands the position they’re in,” Fitch analyst Christopher Pryce said in an interview on Dec. 9. “I am not convinced that the cabinet, even the prime minister, understand just how severe the situation is.”

European officials added to pressure on Greece. ECB President Jean-Claude Trichet said today that “courageous” action is needed to close the budget gap. Economists pointed to Ireland’s decision to cut wages for public servants, compared with Greece’s 1.5 percent pay increase for most workers.

Papandreou appointed Papaconstantinou, who holds a doctorate from the London School of Economics, after he led the socialists to victory in October elections, winning a 10-seat majority in parliament. While the party won on a platform of higher wages that contrasted with Karamanlis’s pledges for a pay freeze, Papaconstantinou was within weeks forced to publish revised figures that cast doubt over Greece’s fiscal health.

Recession

Data showed Greece’s deficit this year would be more than twice the previous government’s forecasts and four times the EU limit. Other revisions showed that, rather than being one of the few European economies still growing amid the worst global slump since World War II, Greece had been in a recession for a year.

Papaconstantinou defends his government’s strategy to reduce the deficit by more than 3 percentage points of GDP to 9.1 percent next year.

“What exactly has changed in the last 40 days to justify a downgrade?” he said of the Fitch decision installment payday loans.

Greece needs to show that it will do more than rely on optimistic revenue forecasts and one-time measures to achieve those gains, economists say.

“Political pressure is mounting for the government to start taking bold action,” Giada Giani, an economist at Citigroup Inc. in London wrote in a note to investors.

About 75 percent of the current deficit reduction plan comes from raising revenue rather than cutting spending, Deutsche Bank AG estimates. Much of that will come from a crackdown on tax evasion, a chronic problem in Greece that a series of governments have pledged to combat.

New Plan

Now after just two months as finance minister and with the rating companies circling, Papaconstantinou must design a new plan due in January to convince EU leaders that Greece is serious about cutting the deficit and deserves an extension of the 2010 deadline to get its shortfall back within the EU limit.

“Rating agencies and EU institutions will probably want to see much more structural measures than currently announced to tackle the deficit, aimed at permanently and credibly increasing tax revenues and tackling age-related soaring public spending,” Giani said.

The government will announce further deficit measures next week and is committed to cutting spending by 10 percent next year to control the shortfall, Papandreou said in an interview with CNBC in Brussels before a summit of EU leaders today. “There will be some more changes that will make this sustainable so that it’s not a one-off deal,” he said.

Risk Overblown

Nevertheless, talk of a default may be overblown because the rest of the EU would probably help Greece, says the head of the Organization for Economic Cooperation and Development.

“The question of the ratings is perhaps of less consequence than one should think,” said Secretary General Angel Gurria in an interview yesterday.

Papaconstantinou, married with two sons aged 14 and 11, says 10 years as an economist at the OECD will help him argue his case in Europe.

“You have to be able to have a presence around the Eurogroup table; you need to know what you’re talking about,” he said. “Especially because the issues have become infinitely more complicated than they have been in the past.

For now, Papaconstantinou says the force of the bond market isn’t disrupting his life as it might other people.

‘‘Actually I sleep quite well,’’ he said. ‘‘I think that’s one of the big advantages I have. I’m fairly level-headed in general and even though I do worry about things they don’t keep me up at night.”

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Staples Inc reported third-quarter results that topped analyst estimates and forecast higher sales in the current quarter as trends improve at its North American retail business.

The results, which sent Staples shares to their highest level since September 2008, contrasted those reported by smaller rivals Office Depot Inc and OfficeMax Inc, who both posted sharply lower quarterly sales in October.

Staples continues to gain market share against those two rivals in North America, Sanford Bernstein analyst Colin McGranahan said in a research note.

Traffic in the company’s North American stores rose for the first time in nine quarters. Sales at North American stores open at least a year, or same-store sales, were flat in the third quarter after posting declines since last December.

CEO Ron Sargent said initiatives to boost its business in core areas like ink and paper during the recession were paying off with higher same-store sales.

“The North American retail and Staples business delivery (sales) trajectory are encouraging,” J.P. Morgan analyst Christopher Horvers said in a note to clients. He added that the profit outlook for the current quarter seems low compared with the company’s sales view.

The company also said it had a good start to the holiday shopping season over Thanksgiving weekend, and would ratchet up efforts to lure customers this year with promotions on items like printer ink. Staples cut back on marketing and promotional spending in 2008 in response to a bleak retail environment.

“I think it probably will be a pretty promotional holiday season,” Sargent said during a conference call.

Q4 FORECAST IN LINE

Office-supply retailers have suffered in the tough economy as both corporate customers and other shoppers have curbed their appetite for nonessential items, especially expensive goods like furniture and business machines.

Staples said it expects fourth-quarter earnings of 36 cents to 38 cents a share before one-time items, and a sales rise of 1 percent to 3 percent.

Analysts on average were expecting Staples to earn 37 cents a share, according to Thomson Reuters I/B/E/S. They had forecast sales of $6.14 billion, a decline from last year’s fourth-quarter tally of $6.17 billion.

Third-quarter net earnings rose to $269.4 million, or 37 cents a share, from $156.7 million, or 22 cents a share, a year earlier.

Excluding one-time items, it earned 39 cents a share in the quarter, which ended on October 31, beating analysts’ average forecast of 38 cents.

Sales fell 6 percent to $6.52 billion but beat analysts’ average estimate of $6.45 billion. 

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Current valuations of waste managers such as Waste Connections Inc, Waste Management Inc and Republic Services Inc give the company’s shares a lot of room to rise, according to a Barron’s story.

In its November 23 edition, Barron’s said Waste Connections shares could rise to $37.50 in a year, citing Raymond James analyst William Fisher’s price target for the stock, which closed at $31.79 on the New York Stock Exchange Friday.

According to Barron’s, investor Todd Lowenstein of Highmark Value Momentum Fund sees Waste Management shares rising as high as $40 from their Friday NYSE close at $32.30.

Republic Service’s Chairman Jim O’Connor has said that analysts’ discounted cash-flow analysis pegs his company’s value in the mid $30s range, according to the story low fee payday loans. This compares to Republic Services NYSE close of $27.40 on Friday.

The story also noted that Warren Buffett has bought 1 percent of Republic Services, based on Berkshire Hathaway Inc filings.

It said that Bill Gates investment vehicle had doubled its shares in Waste Management, giving it a 15 percent stake.

(Reporting by Sinead Carew; Editing Bernard Orr)

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Federal Finance Minister Jim Flaherty warned card companies and banks if they don’t comply with a proposed voluntary code of conduct for the multibillion-dollar credit and debit markets he would bring down the hammer of regulation.

The code, which was designed to address merchants’ claims they’re being gouged, won high praise from retailers and small business owners but drew more cautious response from credit card companies and banks.

While critics worry that a voluntary code would not be enforceable, Flaherty said Thursday he would not hesitate to get tough.

"If we are unsuccessful … with the voluntary code, then we can create an involuntary code," Flaherty said in Ottawa. "We have that power to do that.

"But we’d rather do it in concert with the important stakeholders and arrive at a conclusion that will work for everybody rather than use the heavy hand of regulation. But if we have to, we would, of course."

The long-awaited code contains proposals that would give merchants more clout in dealing with global credit card giants, payment processors and big banks over card fees.

The Retail Council of Canada estimates such fees cost $4.5 billion a year and lead to higher prices for consumers.

Among other things, the code would give merchants the ability to cancel contracts without penalty following notification of a fee change, to offer a variety of discounts for different payment options – and control how debit transactions are processed. Additionally, banks could only issue premium credit cards to consumers on consent or request.

"This is the first time the card companies, the banks and their processors are going to have to compete for the merchants’ business. We’re no longer the milk cows. We’re the customer," said Diane Brisebois, president of the Retail Council of Canada.

However, critics say Flaherty missed an opportunity to go further by making the code mandatory and they’re worried the measures could get watered down during the 60-day public consultation period.

Liberal Senator Pierrette Ringuette said without enforcement, fines or penalties, Visa and MasterCard will be able to cherry-pick which measures to follow. "`Pretty please,’ will not make them abide," Ringuette said.

Liberal MP Dan McTeague said many merchants wouldn’t be able to opt out of their contracts for fear of losing customers. He was also disappointed consumers were not given the same opportunity to cancel their card contracts without penalty.

MP Glenn Thibeault, the NDP’s consumer protection critic, agreed that consumers have no one to complain to if provisions of the code are breached. "With this government, big business is the one that ends up always being on the winning end of any type of voluntary code of conduct."

Credit card companies expressed concern about the impact of the code on market competition.

This "should resolve a commercial dispute for which the global retail lobby operating in Canada has sought government intervention over private negotiation," said Kevin Stanton, president of MasterCard Canada. In particular, he noted the code "could alter the competitive landscape."

Visa said it was "disappointed that the code would allow merchants to supersede consumer choice at the point of sale," adding the announcement "significantly undermines" the introduction of competition in debit.

The proposed code could mean Visa’s new chip card readers, which accept its debit cards, may have to be reprogrammed and 2.5 million Bank of Montreal MasterCard Maestro debit cards already on the market may have to be reissued, a source said. It was not immediately clear who would bear those costs.

The Canadian Federation of Independent Business, which had lobbied for a voluntary code, called it "an early Christmas present."

The Interac Association welcomed the code but said it would work with government to "fill in" the details.

The Canadian Bankers Association said most of the measures don’t apply to banks. Still, it cautioned "customers are best served by an open, competitive marketplace."

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A stronger Chinese yuan is part of the reforms that Beijing needs to implement to increase domestic consumption and help ease global imbalances, the head of the International Monetary Fund said on Monday.

IMF managing director Dominique Strauss-Kahn said that the global economy appeared to have turned a corner toward recovery but that the biggest risk to the global outlook was a premature removal of stimulus measures.

In prepared remarks to a financial conference in Beijing, he added that, despite strains on the current global monetary system, he still expected the dollar to remain the principle reserve currency “for some time.”

(Reporting by Jason Subler; Editing by Ken Wills)

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Treasury Secretary Timothy Geithner on Saturday stressed the necessity of keeping global economic stimulus in place until recovery is assured and opposed the utility of a tax on financial transactions as a way to dampen risky bank behavior.

Speaking at the conclusion of a two-day meeting of Group of 20 finance minister and central bankers, Geithner said there was broad agreement that “growth remains the dominant policy imperative across our economies.”

He said high U.S. unemployment, which hit a 26-1/2-year high at 10.2 percent of the civilian workforce in October, highlighted a “very tough economic environment” that will a period of sustained growth to correct.

Earlier, British Prime Minister Gordon Brown had suggested that the G20 should levy on banks — blamed for the excessive risk-taking that led the world into a now-easing financial crisis — and used the proceeds to fund future bailouts.

Geithner played down that idea, noting that the Obama administration was already pushing an overhaul of financial market rules in Congress that would ensure that banks pay the costs of their failures in future from their own pocket.

“A day-by-day financial transaction tax is not something we are prepared to support,” Geithner said in an interview with Sky News. In his concluding press conference, Geithner was asked repeatedly to say why he opposed such a tax on banks and indicated he doubted its effectiveness.

“This idea (of a bank transaction tax) has been around for a long time…I think frankly the experiences are mixed,” he said, expressing an American view that there was no widespread backing for such a tax.

Canadian Finance Minister Jim Flaherty was similarly skeptical.

“It’s one of the ideas that’s on the table, but is not particularly attractive to me as finance minister of Canada. We have been a government that has been reducing taxes,” Flaherty said.

ON DANGEROUS GROUND

Geithner’s key message was that recovery still remains on perilous ground and that it was too soon to discuss the timing for removing the massive fiscal and monetary stimulus that countries around the world have poured into their economies.

“Government policy has to provide a bridge to growth led by the private sector,” he said. “We’re now in the middle span of that bridge.”

That meant policymakers must move cautiously in trying to bring down huge budget deficits without choking off chances for growth led by consumer spending and business investment.

“If we put the brakes on too quickly we will weaken the economy and the financial system, unemployment will rise, more businesses will fail, budget deficits will rise, and the ultimate cost of the crisis will be greater,” Geithner said.

“It’s too early to start to lean against recovery.” 

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