New Zealand’s economic growth eased to 0.5
percent in the March 2018 quarter, following a 0.6 percent rise last quarter. This means
the economy is growing at 2.7 percent, the lowest pace since mid-2014.
This quarter, we saw a modest rise in service-related industries which rose 0.6 percent and this
follows a strong rise last quarter. Business services made the largest upwards
contribution, and this covers such things as specialist advice, legal, engineering,
and administrative services and makes up about 10 percent of the New Zealand economy.
Construction activity fell by 1 percent over the quarter. This was down across the board
with residential buildings, non-residential buildings, as well as infrastructure. However,
activity is up by 1.4 percent over the year. We also look at the economy in terms of the
money that is spent on the goods and services. Household spending was flat over the quarter
following a strong rise in the December quarter. And this mirrors what we’ve seen in the
retail trade industry as well. Spending was down on used cars, which we know was impacted
by lower imports, with stink bugs causing shipments of about 8,000 cars to be turned
away at the border in February. That said, Kiwi households took a record number
of overseas trips and our spending overseas rose by 2.9 percent.
New Zealand has been experiencing record inward migration recently. This has seen our population
rise by nearly 27,000 people over the quarter. When we compare GDP growth to population growth,
GDP per capita was flat over the quarter, and up 0.6 percent over the year.
Our GDP statistics are a snapshot of the performance of the economy and tell us about the goods
and services that New Zealand consumes and produces. It is an important gauge that tells
a range of users, including policy makers or the major trading banks, how to understand
and manage the New Zealand economy. It provides an overarching framework that
tells us how industries are performing, which ones are doing well, which ones are not performing
quite so well, how households are spending their money, how businesses and Government
is investing, and about the Government’s general contribution to the economy.
We look at the economy by summing up what is called ‘value added’ – and this is
the difference between what a firm produces and the resources that it uses up in the process.
This allows us to take an industry view on the economy to say which industries are detracting
from or are contributing to growth in any particular quarter.