New Zealand: GDP growth accelerates in Q2; remains modest
September 17, 2015
In the second quarter of 2015, GDP increased a seasonally-adjusted 0.4% over the previous quarter, which marked an acceleration over the 0.2% expansion observed in Q1. The print slightly undershot market expectations of a 0.5% increase. Compared to the same quarter of the previous year, GDP increased 2.4% in Q2, which marked the softest increase since Q4 2013 (Q1: +2.7% year-on-year).
Q2’s acceleration was mainly driven by significant improvements in agriculture and mining. Goods producing industries increased from Q1’s 0.2% rise to a 0.4% growth in Q2. Manufacturing industries contracted 0.5% in Q2 (Q1: -1.1% quarter-on-quarter) and construction activities decelerated from Q1’s 2.2% rise to a 0.8% increase in Q2. Electricity, gas and water rose 2.4% in Q2 (Q1: 0.6% qoq). Growth in services slowed from 0.7% in Q1 to 0.5% in Q2.
On an expenditure basis, GDP grew 0.2% over the previous period in Q2, which was below Q1’s 0.3% expansion and marked the lowest value since Q4 2013. The print reflected a weaker performance in the external sector. Total consumption grew 0.9% over the previous quarter, which was above Q1’s 0.5%. Private consumption rose 0.9% (Q1: 0.2%) and government consumption grew 1.0% (Q1: 1.2%). Fixed investment recovered from its 1.8% fall recorded in Q1 and grew 1.7% in Q2. However, the external sector deteriorated as exports swung from a 1.6% increase to a 1.1% fall in Q2. Imports grew 2.3% (Q1: +0.7% qoq). Consequently, the external sector’s net contribution to overall economic growth fell from 0.2 percentage points in Q1 to minus 1.1 percentage points in Q2.
Author: Eric Denis , Economist