New Zealand economy grows slowly

Economic activity, as measured by gross domestic product (GDP), was up 0.2 percent in the September 2009 quarter, Statistics New Zealand said today. 

This follows a 0.2 percent increase in the June 2009 Quarter. These small increases in economic activity follow five quarters of contraction in the New Zealand economy. 

In level terms, economic activity during the September 2009 quarter was 2.9 percent lower than in the December 2007 quarter when economic activity last peaked.

"The economy continued to grow slowly in the September 2009 quarter, and the picture across industries was mixed," said National Accounts manager Rachael Milicich. "On the production side of the economy, mining and business services showed the largest increases."

By industry, the largest movements were:

 real estate and business services, up 2.2 percent, driven by business services

 mining activity, up 11.1 percent, driven by an increase in both extraction (mainly offshore oil production), and exploration (as measured by metres drilled)

 manufacturing activity, down 1.9 percent, and now back to the June 1999 quarter level

 construction activity, down 4.4 percent, the sixth decrease in the last seven quarters.

The expenditure measure of GDP, which is released concurrently with the production measure and is conceptually the same, was also up 0.2 percent in the September 2009 quarter. 

The production measure of GDP shows the volume of goods and services produced during the period, while the expenditure measure of GDP shows how those goods and services were used.

The volume of spending by New Zealand households was up 0.8 percent in the September 2009 quarter.

Spending on durable goods (big-ticket items such as furniture, appliances, and cars) was up 2.0 percent, and spending on services also increased. Household spending on non-durables (which includes alcohol and food) fell 0.8 percent.

Investment in fixed assets, measured by gross fixed capital formation, was down 1.8 percent in the September 2009 quarter. 

The largest contributors to the decline were plant, machinery, and equipment

investment (down 8.0 percent), other construction, which includes roads and bridges (down 9.3 percent), and residential building (down 5.0 percent).