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.