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GDP rises due to strength in services

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.

 

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Kiwi economy on the rise

Spending on durable goods, which includes passenger cars drives household spending up 0.9 per cent.

Economic performance, measured by Gross Domestic Product (GDP), grew 0.6 per cent in the September 2017 quarter, following a revised 1.0 per cent growth in the June quarter, Stats NZ said.

Household spending was up 0.9 per cent from the previous June quarter. This was driven by spending on durable goods, which includes passenger cars and services. 

Spending on durable goods increased 2.3 per cent, due to increased spending on clothing, furniture, audio-visual equipment and furnishings. 

Construction industry was the main instigator of economic growth
Construction activity rebounded in the September 2017 quarter, up 3.6 percent after falls in the previous two quarters.

Investment in other construction (infrastructure) and residential buildings reported strong increases. Expenditure on road and rail infrastructure were the key drivers of investment in infrastructure, which experienced its strongest increase since 2007. 

“Construction activity recovered this quarter, unwinding the previous two quarterly falls,” national accounts senior manager Gary Dunnet said. “This reflected higher construction-related investment, with investment in infrastructure and residential buildings also reporting strong increases.” 

Services Industry
Service industries continued to grow steadily, up 0.6 percent in the September 2017 quarter.

Industries that contributed most to this growth were health care and residential care; business services; and arts, recreation and other services.

GDP per capita up over the quarter
GDP per capita was up 0.2 percent in the September 2017 quarter, after a revised 0.5 percent growth in the June 2017 quarter.

For the year ended September 2017, GDP per capita was up 0.8 percent.

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GDP up in March quarter as retail lifts

Gross Domestic Product (GDP) rose 0.5 per cent in the March 2017 quarter, following a 0.4 per cent rise in December, Stats NZ has said.  This sets annual GDP growth for the year ending March 2017 at three per cent.

However, GDP per capita declined 0.1 per cent, and real gross national disposable income per capita was down 0.9 per cent in the quarter, when seasonally adjusted.

“Much lower building activity combined with mixed results for the service sector took the shine off higher dairy production and saw a second quarter of moderate overall GDP growth,” national accounts senior manager Gary Dunnet said.

“At an industry level, 11 out of 16 industries increased this quarter, with agriculture and retail trade having the biggest increases, while construction was significantly down.”

Agriculture grew 4.3 per cent due to increased milk production, while construction fell 2.1 per cent. Retail trade and accommodation was up 1.8 per cent, which Stats NZ said was driven by an increase in motor vehicles and parts.

Imports of goods rose 0.6 per cent in the quarter ending March 2017, which also eroded GDP.

The size of the economy in current prices was $265 billion, of which $150 billion was household spending, $70 billion exports, $60 billion investment and $50 billion of government expenditure. Imports were approximately $70 billion.

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GDP up across most of New Zealand

Twelve of New Zealand’s 15 regional economies recorded nominal GDP increases in the year ending March 2016, according to a Stats NZ report released today.

The largest increases were found in the Bay of Plenty, which grew 7.7 per cent, Auckland, up six per cent, and Otago, up 4.8 per cent. The national increase was 4.1 per cent.

“The Bay of Plenty’s increase was underpinned by strong performances across the professional and administrative services, and agriculture,” senior national accounts manager Gary Dunnet said.

“The increase in Auckland was driven by the professional services, finance, and transport industries,” he added.

Some regions declined over the same period. Taranaki GDP fell 8.5 per cent. The West Coast was down 2.8 per cent, and Southland shrank one per cent.

“These decreases reflected a fall in mining and agriculture activity, mainly from the impact of lower international prices for oil, coal, and dairy products,” Dunnet said.

Despite a sharp fall in GDP, Taranaki retained the title of highest GDP per capita, at $71,297, followed by Wellington, with $67,888 and Auckland, with $58,717.

The lowest GDP was recorded in Northland, at $36,531. The national average was $54,178.

Provisional data on regional industry activity shows growth in key sectors among most regions. Retail trade and transport, postal and warehousing both increased in value across all 15 regions, including those with a falling GDP.

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GDP growth eases in December

New Zealand’s Gross Domestic Product (GDP) was up 0.4 in the December 2016 quarter, following a revised 0.8 per cent increase in the September 2016 quarter.

Growth for the year ending December 2016 was 3.1 per cent, according to the latest Statistics New Zealand report.

GDP per capita fell 0.2 percent this quarter and increased 0.9 per cent overall for the year.

“Growth in service industries was partly offset by weaker activity in primary industries also flowing through into manufacturing,” national accounts senior manager Gary Dunnet said.

“At an industry level, growth was a mixed bag, with only half of our 16 industries rising.”

The largest industry increases include business services, up 1.7 percent, arts, recreation, and other services, up 3.8 percent and construction, up 1.8 percent.

The main decreases by industry were manufacturing, down 1.6 percent, agriculture, down 0.6 percent, and mining, down 2.3 percent.

Imports for the December 2016 quarter grew 1.9 per cent due to a 2.4 per cent increase in goods and 1.5 per cent rise in services. Imports of capital goods were up 4.1 per cent, which reflects a growth in investment in plants, machinery and equipment.

These and a 8.3 per cent increase in passenger motor vehicle imports were the primary contributors to the growth in imports in the December quarter.

Household consumption expenditure increased 0.4 per cent in the December quarter, following two quarters of strong growth. This totalled a yearly 4.3 per cent increase in expenditure, the highest annual movement since March 2006.

Houeshold expenditure on durable goods rose 1.3 per cent, due to increased spending on motor vehicles, furniture and furnishings, and audio-visual equipment. Expenditure on services rose 0.9 per cent.

Spending on non-durables declined 0.7 per cent in the Decemebr 2016 quarter, led by a fall in petrol and grocery spending.

The size of the economy in current prices was $261 billion.

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GDP increase across board

Gross domestic product rose 1.1 percent in the September 2016 quarter, following an increase of 0.7 percent in the June 2016 quarter.

According to Statistics New Zealand, 13 of the 16 industries were up, with the main weakness coming from the agriculture sector. “This quarter’s rise points to broad-based growth,” national accounts senior manager Gary Dunnet said.

Household spending continued its strong growth, increasing 1.6 percent this quarter, following a 2.0 percent increase in the June quarter.

Service industries continued to grow, increasing 1.1 percent in the September quarter. Manufacturing activity rose on the back of food, beverage, and tobacco manufacturing; and transport equipment, machinery and equipment manufacturing.

Construction grew 2.1 percent, with all construction sub-industries showing increases. This growth also reflected higher construction-related investment, with continued investment in residential building.

GDP per capita increased 0.6 percent this quarter, following a 0.2 percent increase in the June quarter.

Annual GDP growth for the year ended September 2016 increased to 3.0 percent. The size of the economy in current prices was $256 billion.

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