New Zealand: Growth stable in Q1
June 20, 2019
The economy expanded 0.6% in quarter-on-quarter seasonally-adjusted terms in the first quarter, unchanged from Q4 2018’s result. Likewise, on a year-on-year basis, first quarter growth matched the previous quarter’s 2.3% expansion, which had marked the lowest print in five years.
The first-quarter expansion was chiefly led by goods-producing industries, which accelerated on the back of the sharpest increase in construction activity in a year and a half, and a rebound in manufacturing output (Q1: +1.4% quarter-on-quarter seasonally-adjusted; Q4 2018: +0.4% qoq s.a.). In contrast, the services sector posted its lowest quarterly growth since September 2012 (Q1: +0.2% qoq s.a.; Q4 2018: +0.9% qoq s.a.), dragged by lower activity in the rental, hiring and real estate services, as well as in the retail trade and accommodation sectors. Lastly, primary industries shrank 0.7% in Q1 (Q4 2018: -0.3% qoq s.a.), as adverse weather conditions weighed on the agricultural sector.
On the expenditure side, both fixed investment and government expenditure gathered momentum in the first quarter, while private consumption lost stride. On the external front, exports recorded the fastest quarter-on-quarter increase in more than four years in Q1, while imports rebounded mildly.
Author: Nicolás J. Aguilar, Economist