Weak primary industries slow GDP growth

Weak primary industries slow GDP growth

18 June 2015

After a series of strong increases, GDP increased 0.2 percent in the March 2015 quarter, Statistics New Zealand said today. The lower growth reflected a 2.9 percent fall in primary industries (agriculture, forestry, and mining) – the largest fall since September 2010. Despite lower quarterly growth, annual growth was still strong, at 3.2 percent.

“Oil and gas were big factors in the lower GDP growth this quarter,” national accounts manager Gary Dunnet said. "There was less extraction and exploration, as international prices fell."

Agriculture decreased 2.3 percent in the March 2015 quarter. Lower milk production was behind the decrease, in a quarter that had drought conditions and lower dairy prices. Forestry production and exports of forestry products were also down.

A 2.4 percent increase in retail trade and accommodation helped to offset the decrease in primary industries. Retail trade and accommodation has had continued strong increases and now has its largest annual growth in almost a decade, at 6.1 percent. Possible contributors this quarter include the 2015 Cricket World Cup and more visitors during Chinese New Year than in the past. International tourist spending in New Zealand increased 2.3 percent this quarter, and there was an increase in arts and recreation (including sport, recreation, and gambling services), and international air travel.

It was a mixed picture for the rest of the economy this quarter. On the expenditure measure of GDP, household spending increased 0.7 percent, while investment fell 1.9 percent. An increase in construction investment was offset by large decreases in both machinery and equipment investment.

The size of the economy (in current prices) was $239 billion for the year ended March 2015.

For more information about these statistics:

• Visit Gross Domestic Product: March 2015 quarter

ends

© Scoop Media