Small Increase In Economic Activity
Gross Domestic Product: September 2001 quarter
There was little change in the level of economic activity in the September 2001 quarter, according to information released today by Statistics New Zealand. Gross domestic product increased 0.2 percent, following the 1.8 percent growth recorded in the June quarter. For the year ended September 2001 the economy grew 2.1 percent.
Internal demand increased this quarter, up 1.7 percent. Much of this increase was due to a build-up of inventories, particularly in the wholesaling industry, and the import of two military helicopters by the New Zealand Defence Force, which boosted government spending. Household spending also rose, up 0.5 percent, the third quarterly increase in a row.
Partly countering these rises, business investment declined 4.9 percent, most notably in the plant, machinery and equipment asset type which had contributed most of the increase last quarter. Much of the increase in internal demand this quarter was met from imports. In addition, there was a fall in exports, down 2.1 percent, which, together with the lift in imports, offset the impact of increased internal demand resulting in a small increase in the overall level of domestic economic activity.
The increase in economic activity mainly occurred in the primary and service industries. Primary industry activity was up 1.4 percent this quarter. This was largely a result of growth in forestry and logging, with smaller increases in agriculture and mining also contributing. Forestry and logging activity rose 4.5 percent and agriculture 0.7 percent. Good spring conditions have seen higher numbers of lambs tailed than expected, but with sheep numbers down as a result of drought conditions earlier in the year, births have not changed significantly from last spring. Farmers have responded to high cattle prices by retaining and building up stock. Fishing was the one primary industry to record a decline, reflected in the fall in the export of seafood.
Most service industries recorded increases this quarter. Transport and communication services were up 3.1 percent, and property and business services 1.7 percent. Retail trade was flat, with a decline in the sales of department stores offset by growth in other personal and household goods retailing, and also in motor vehicle retailing and services. The level of activity in accommodation, restaurants and bars grew this quarter, in line with increased tourist numbers. Wholesale activity was down 1.5 percent.
Goods producing industries declined this quarter, with manufacturing activity down 1.8 percent. Meat and dairy manufacturing fell 10.2 percent, although dairy processing was up on the September quarter last year and for the September 2001 year. Other manufacturing industries to record declines include textile and apparel manufacturing (down 4.0 percent), printing, publishing and recorded media manufacturing (down 3.6 percent) and metal product manufacturing (down 2.1 percent). Non-metallic mineral production slightly offset the fall with an increase of 7.1 percent.
The power crisis resulted in electricity, gas and water value added dropping 8.6 percent this quarter. Total generation of electricity was down 3.2 percent on the June quarter, with hydro generation at low levels due to the drought conditions. On the other hand thermal generation was at its highest level since 1959.
Construction activity remained largely unchanged this quarter and is down 10.7 percent for the year.
The expenditure-based measure of gross domestic product, released concurrently with the production-based measure, recorded a 0.7 percent increase.