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Domestic Spending Eases This Quarter

Domestic Spending Eases This Quarter

Economic activity increased 0.5 percent in the September 2007 quarter, Statistics New Zealand said today. Service industries continue to underpin growth, with finance, insurance, property and business services industries; and transport and communication industries accounting for over half of this quarter's increase.

In the year ended September 2007, the economy grew 2.7 percent. Domestic spending increased 0.2 percent this quarter following three previous quarters of strong growth. Growth in household spending has continued to ease this quarter, increasing 0.3 percent following 0.5 percent growth in the previous quarter.

Overall, the expenditure-based measure of GDP recorded a 0.3 percent increase in the September 2007 quarter. Gross fixed capital formation decreased 0.2 percent this quarter, largely due to a decrease in investment in transport equipment (coming off the previous quarter's commissioning of the HMNZS Canterbury).

This was partly offset by strong results for investment in plant, machinery and equipment and increased expenditure on offshore exploration. Increased exports of petroleum products in the September 2007 quarter, as a result of production starting at the Tui oilfield, were more than offset by reduced exports of dairy products.

From an industry perspective, the majority of the growth in the September 2007 quarter came from a 0.7 percent increase in service industries, with increased activity in finance and business services driving this growth. Primary industries also contributed to this quarter's growth as a result of increased activity in mineral extraction (from the Tui oilfield) and offshore exploration.

Goods-producing industries decreased 1.4 percent in the September 2007 quarter, with manufacturing down 2.2 percent and electricity, gas and water down 3.8 percent. Most manufacturing industries recorded declines in activity in the September 2007 quarter, with textile, apparel and footwear manufacturing recording the only notable increase in activity.

Geoff Bascand Government Statistician

ENDS

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