The economy, as measured by GDP, grew 0.6 per cent in the December 2017 quarter, Stats NZ said today. Growth was driven by increases in the service industries but was tempered by falls in the primary sector.
“Growth was widespread across many service industries, with business services, and rental hiring and real estate services providing momentum,” national accounts senior manager Gary Dunnet said. “Retail trade and wholesale trade were also key contributors to growth this quarter.”
Service industries drive growth
Activity in the service industries rose 1.1 per cent, with 10 of the 11 service industries in the December 2017 quarter. Overall growth in the service industries was led by a 2.3 per cent increase in business services.
Other service industries making a significant contribution included wholesale, retail, real estate, and transport.
Primary industries weaken, down 2.4 per cent
Following a wet spring, New Zealand’s hottest summer on record appears to have negatively affected the primary sector. Agricultural production fell 2.7 per cent this quarter and dairy exports fell 4.4 per cent.
Capital goods lift investment
Investment in fixed assets was up 2.1 percent in the December 2017 quarter, following a revised 1.8 percent increase in the September 2017 quarter.
Higher investment in transport equipment (up 17 per cent) and plant, machinery, and equipment (up 5.9 per cent) were the two main drivers of investment growth this quarter. This saw higher imports of capital goods.
Imports of passenger motor cars also contributed to the increase in imported goods. In the December quarter, imports of passenger motor cars increased by 1.8 per cent, following a 2.9 per cent decrease in the September 2017 quarter.
GDP per capita rises 0.1 per cent
When comparing GDP growth to population change, GDP per capita was up 0.1 percent in the December 2017 quarter. This follows a 0.2 percent increase in the September 2017 quarter.
Real purchasing power up 1.4 per cent
New Zealand’s ability to buy goods and services from its income rose over the December 2017 quarter by 1.4 per cent.
Over the December 2017 year, real purchasing power per capita increased 1.3 percent. This shows that New Zealand’s real purchasing power increased more than New Zealand’s population over this period.