New Zealand: GDP grows at the slowest rate in two years in Q1
June 18, 2015
In the first quarter of 2015, GDP increased a seasonally-adjusted 0.2% over the previous quarter, which marked a deceleration over the 0.7% expansion observed in Q4. The print undershot market expectations of a 0.6% expansion and marked a two-year low. Compared to the same quarter of the previous year, GDP increased 2.6% in Q1 (Q4: +3.5% year-on-year).
Q1’s deceleration was mainly driven by steeper contractions in agriculture and mining. Goodsproducing industries increased in Q1 from Q4’s flat growth to a 0.6% rise. Manufacturing industries contracted 0.3% in Q1 (Q4: +0.9% quarter-on-quarter) and construction activities rebounded from Q4’s 0.3% contraction to a 2.4% increase in Q1. Electricity, gas and water decreased 0.5% in Q1 (Q4: -2.7% qoq). Growth in services slowed from 0.9% in Q4 to 0.7% in Q1. Wholesale and public administration, two of the five sub-sectors of the services category, swung from expansion in Q4 to contraction in Q1.
On an expenditure basis, GDP grew 0.1% over the previous period in Q1, which was below Q4’s 1.2% expansion and marked a three-year low. The print reflected weaker performances in both the external sector and domestic demand. Total consumption grew 0.6% over the previous quarter, which was down from Q4’s 0.7%. While private consumption growth mirrored Q4’s 0.7%, government consumption fell from Q4’s 0.6% expansion to a 0.2% rise in Q1. Fixed investment contracted notably by 1.9% in Q1 (Q4: -0.2% qoq). In addition, the external sector deteriorated as exports fell from a 5.9% increase to a 1.5% rise in Q1. Imports grew 1.0% (Q4: +2.8% qoq). Consequently, the external sector’s net contribution to overall economic growth fell from 0.7 percentage points in Q4 to 0.1 percentage points in Q1.
Author: Eric Denis , Economist