Economic growth in New Zealand appears to have staggered
to a halt in September, with momentum far less than previously
Statistics New Zealand yesterday released its third-quarter
GDP (gross domestic product) figures which showed economic
activity rising only 0.2%, in line with the Reserve Bank's
forecasts but below economists who were picking, in general,
a 0.6% rise in growth.
Finance Minister Bill English was reasonably upbeat about the
figures, saying the economy remained on track for moderate
growth in the next few years.
''After coming off a good growing season and a strong year
for agriculture, other indicators had already pointed to a
slightly softer performance in the third quarter,'' he said.
However, New Zealand First leader and former treasurer
Winston Peters said there were little grounds for
pre-Christmas cheer in the latest growth figures. The New
Zealand economy had well and truly run out of steam.
The abysmal growth figure was matched by other bleak economic
indicators, he said.
Unemployment was at 7.3%, the current account deficit had
blown out and the Government's much-touted budget surplus by
2014-15 was wafer thin, he said.
''Given the picture of ongoing economic weakness, the
Government's complacency is inexcusable,'' he said.
Labour finance spokesman David Parker said the anaemic
economy was funnelling the meagre proceeds of growth into the
hands of a minority of New Zealanders who were already the
''At 0.2%, growth in the last quarter was closer to zero than
1%. The vast majority of New Zealanders are no better off.
That's because National is creating the highest inequality
This week, the Government had announced a hike in petrol
prices, the external deficit was $10 billion and online job
advertisements were down. It was no wonder record numbers of
Kiwis were leaving for Australia, Mr Parker said.
Statistics NZ figures showed the weaker-than-expected GDP
result reflected payback in many areas of strength seen in
the three months ended June, with falls in infrastructure
construction and agriculture production in September.
In addition to the softer-than-expected September result,
there were downward revisions to growth during the first half
ASB economist Christina Leung said the results suggested the
boost from earthquake rebuilding was not as great as first
thought. While overall construction activity increased in the
third quarter, there was a fall in heavy and civil
construction activity which mainly consisted of spending on
''This reflects payback from the large increase seen over the
previous quarter, perhaps highlighting that some construction
projects are quite lumpy.''
On the expenditure side, that was reflected in the large fall
in other construction and plant and machinery.
Another area of surprise was agriculture production, she
said. While she expected a fall from the strength seen during
the first half of the year, the third-quarter fall was
greater than milk production figures suggested.
To the extent favourable weather conditions conducive to
pasture growth boosted milk production in the first half,
production was now easing from those high levels. That drove
weaker-than-expected activity in agriculture and food
manufacturing sectors, Ms Leung said.
There was a large fall in mining; Statistics NZ noted lower
oil and gas extraction activity.
ASB had revised its official cash rate (OCR) forecast and now
believed the first rise would come in December next year
rather than September.