New Zealand GDP

New Zealand

New Zealand: Economic growth accelerates in Q3

December 18, 2014

In the third quarter, GDP increased a seasonally-adjusted 1.0% over the previous quarter, which marked an acceleration over the 0.7% expansion observed in Q2. The print exceeded market expectations of a milder 0.7% expansion. Compared to the same quarter of the previous year, GDP increased 3.2% in Q3 (Q2: +3.2% year-on-year).

Q3’s acceleration was largely driven by the mining and agricultural sectors as well as by the goods production industries. Goods producing industries picked up from Q2’s 0.1% quarterly expansion to a 0.9% rise in Q3. While the electricity, gas and water industries as well as the manufacturing industries rebounded in Q3, construction swung to a contraction. The agricultural sector expanded 5.1% over the previous quarter in Q3, contrasting Q2’s 1.1% contraction. In addition, mining rebounded to an 8.1% expansion in Q3 (Q2: -5.4% quarter-on-quarter). Services expanded a modest 0.3% in Q3, which came in below the 1.3% growth tallied in Q2. While three of the five sub-sectors of the services category expanded at a faster pace compared to Q2, transport contracted and wholesale trade slowed down markedly.

On an expenditure basis, GDP grew 1.4% over the previous period in Q3, which marked an improvement compared to Q2’s modest 0.2% expansion. Stronger private consumption and fixed investment as well as an improved performance of the external sector were behind the acceleration. Total consumption grew 1.2% over the previous quarter, matching Q2’s print. While private consumption rose from Q2’s 1.3% growth to 1.5% in Q3, government consumption decelerated from Q2’s 1.0% expansion to a 0.4% rise in Q2. Fixed investment picked up to 3.5% growth in Q3 (Q2: +1.8% qoq). The external sector improved as exports advanced from a 4.2% contraction to a milder 0.5% decline in Q3 and imports grew 0.3% (Q2: +3.0% qoq). Consequently, the external sector’s net contribution to overall economic growth rose from minus 2.2 percentage points in Q2 to minus 0.2 percentage points in Q3.

FocusEconomics Consensus Forecast panelists expect the economy to grow 2.9% in 2015, which is unchanged from last month’s forecast. For 2016, the panel sees the economy expanding 2.6%.

Author: Teresa Kersting, Economist

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New Zealand GDP Chart

New Zealand GDP Q3 2014 0

Note: Quarter-on-quarter changes of seasonally adjusted GDP in %.
Source: Statistics New Zealand and FocusEconomics Consensus Forecast.

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