NZ GDP Grew in Line with Market Expectations but Below RBNZ Forecast

According to Stats New Zealand, gross domestic product expanded 0.6 percent in the three months to December 21 versus a 0.3 percent rise in the September quarter and was 2.3 percent higher than the same quarter a year earlier.
James Hyerczyk
NZD/USD

New Zealand’s economy grew in line with the forecast in the fourth quarter, led by solid gains in the retail and accommodation sectors. These sectors posted their biggest jumps in activity since the 2011 Rugby World Cup.

According to Stats New Zealand, gross domestic product expanded 0.6 percent in the three months to December 21 versus a 0.3 percent rise in the September quarter and was 2.3 percent higher than the same quarter a year earlier.

Economists were looking for GDP to expand 0.6 percent on the quarter and 2.5 percent on the year, according to the median in a Bloomberg poll. Earlier in the month, the Reserve Bank of New Zealand had forecast an expansion of 0.8 percent.

“Growth this quarter was led by a 0.9 percent rise in service industries, while the goods-producing industries grew 0.2 percent,” national accounts senior manager Gary Dunnet said.

The Details from Stats NZ

Stats New Zealand said, retail and accommodation rose 2.5 percent on the quarter, driven mainly by food and beverage services. Transport, postal and warehousing lifted 3.2 percent on the quarter, driven mainly by road transport.

Within the goods-producing industries, which represent around 19 percent of GDP, construction grew 1.8 percent on quarter after falling 0.6 percent in the September quarter.

Manufacturing activity, however, fell 0.4 percent during the quarter and electricity, gas, water and waste services fell 1.1 percent.

The primary industries, which represent 7 percent of GDP, fell 0.8 percent. Agriculture was down 1.3 percent, mining was down 1.7 percent, forestry and logging fell 1.6 percent and fishing activity was down 0.9 percent.

On an expenditure measure, household spending was up 1.3 percent in the December quarter and investment in fixed assets was up 1.4 percent on the quarter, after falling 1.1 percent in the September quarter.

On a per capita basis, GDP grew 0.1 percent in the quarter from a revised 0.1 percent fall in the September quarter. For the year ended December, per capita GDP rose 0.9 percent, marking the lowest annual growth since 2011.

Stats New Zealand also said the real purchasing power of New Zealanders fell in the December quarter with real gross national disposable income, or RGNDI, down 0.2 percent in the December quarter.

Finally, Stats NZ said that a population increase of 0.4 percent over the quarter meant that the RBNDI per capita was down 0.6 percent in the December quarter following a 0.4 percent lift in the September quarter.

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