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

 

Constructions Builds: Consents Top $2 Billion For The First Time

Building consents reached a record $2 billion in March 2017, boosted by new homes and several big non-residential projects, Stats NZ said today. This was up 37 percent compared with March 2016. More>>

Other Stats:

Health: Work Underway To Address Antimicrobial Resistance

As part of a global response the Ministries of Health and Primary Industries have today jointly published ‘Antimicrobial Resistance: New Zealand’s current situation and identified areas for action’ to respond to the changing pattern of antimicrobial resistance in New Zealand. More>>

ALSO:

Employment: Vodafone Announces Family Violence Policy To Support Team

From today, any of Vodafone’s 3,000 workers affected by family violence will be eligible for a range of practical support, including up to 10 additional days of paid leave per year. More>>

Burning Up Over Saturn: Cassini's Grand Finale

With propellant running low, NASA scientists are concerned that the probe might accidentally crash into one of Saturn’s nearby moons, which could contaminate it with Earthling bacteria stuck to the spacecraft. Instead, the spacecraft will be safely "disposed" in Saturn's atmosphere. More>>

ALSO:

Our Fresh Water: Monitoring Report Confirms Serious Challenges For Rivers

• nitrogen levels are getting worse at 55 percent and getting better at 28 percent of monitored river sites across New Zealand • phosphorus levels are getting better at 42 percent and getting worse at 25 percent of monitored river sites across New Zealand More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news