Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


UPDATE: NZ economy grows at 3.3% annual rate

UPDATE: NZ economy grows at 3.3% annual rate as construction posts largest increase in 14 years

By Tina Morrison

(Adds economist comment starting in fourth paragraph.)

June 19 (BusinessDesk) - New Zealand’s economy grew at a 3.3 percent rate in the year through March, the fastest pace in eight years, supporting the central bank’s view that it must press on with interest rate increases to keep inflation at bay.

The economy grew at a 1 percent pace in the first three months of the year, from an upwardly revised 1 percent gain in the fourth quarter, marking three quarters of growth at 1 percent or above, Statistics NZ said. Quarterly growth was below the Reserve Bank's 1.1 percent expectation and the 1.2 percent expected in a Reuters poll of economists although the annual rate beat the Reuters forecast for 3.1 percent.

New Zealand’s economic expansion in the latest quarter was helped by a 12.5 percent rise in construction, which accounted for two-thirds of GDP growth and marked its largest increase in 14 years. Last week, the Reserve Bank hiked the official cash rate by a quarter point to 3.25 percent and said the economy’s expansion had “considerable momentum”, raising its estimate for growth in the first half of the year to 4 percent from 3.5 percent.

"While the headline was a bit softer than we or the Reserve Bank had expected, taking revisions to previous quarters into account, today's result still suggests that the economy had developed considerable momentum at the start of the year," Westpac Banking Corp. senior economist Michael Gordon said in a note. "Today's numbers will do nothing to dissuade the Reserve Bank from its intention to continue hiking the OCR in its July review."

New Zealand's central bank is expected to deliver another two rate rises this year, according to a Reuters poll of economists. Nine of 13 economists expect the next rise to come in July.

The New Zealand dollar fell to 87.17 US cents from 87.34 cents immediately before the report was released at 10:45am. The trade-weighted index eased to 81.11 from 81.25. Some currency traders had bet the quarterly GDP report could exceed expectations at 1.4 percent.

Growth in construction was strong in Canterbury, and the rest of the country, the statistics agency said. Construction has surged in Christchurch as the city is being rebuilt following a series of earthquakes.

Westpac's Gordon said he expects a "slightly slower" pace of GDP growth in the June quarter, as the first quarter's "monster" ramp-up in construction is unlikely to be repeated and some monthly indicators have slowed recently.

Mining was the second-largest contributor to growth in the quarter, up 6.3 percent, the agency said. The rise was driven by oil and gas extraction activity which marked its largest quarterly growth since the December 2007 quarter, it said.

Meantime, retail trade and accommodation increased 1.4 percent as retail trade rose 0.9 percent driven by an increase in furniture, electrical and hardware retailing.

Dragging on growth, wholesale trade activity fell 1.5 percent, partly due to a decrease in machinery and equipment wholesaling.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Sky City : Auckland Convention Centre Cost Jumps By A Fifth

SkyCity Entertainment Group, the casino and hotel operator, is in talks with the government on how to fund the increased cost of as much as $130 million to build an international convention centre in downtown Auckland, with further gambling concessions ruled out. The Auckland-based company has increased its estimate to build the centre to between $470 million and $530 million as the construction boom across the country drives up building costs and design changes add to the bill.
More>>

ALSO:

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news