Service industries drive GDP growth

Gross domestic product (GDP) grew 0.6 percent in the December 2018 quarter, after a 0.3 percent rise in the previous quarter, Stats NZ said today.

“Growth this quarter was led by a 0.9 percent rise in service industries, while the goods-producing industries grew 0.2 percent,” national accounts senior manager Gary Dunnet said. “Growth was mixed at the industry level, with 10 of the 16 industries recording increases.”

Retail and accommodation led the service industries with a 2.5 percent rise, driven mainly by food and beverage services. This was reflected in higher household spending on restaurants and hotels. Overall, the quarterly growth in retail and accommodation was the largest seen since the 2011 Rugby World Cup.

Transport, postal, and warehousing (up 3.2 percent) was another notable contributor, as was rental, hiring, and real estate (up 1.1 percent).

Construction (up 1.8 percent) was the only goods-producing industry to record an increase, with its first large rise in over a year. Both residential and non-residential construction contributed significantly to the increase, with infrastructure construction steady.

Primary industries struggled across the board – agriculture, forestry, and fishing fell on the back of stronger results in previous quarters.

“Reduced livestock production had an impact on agriculture, while mining activity was again affected by the disruptions at the Pohokura field, after a partial recovery last quarter,” Mr Dunnet said.

GDP per capita was up 0.1 percent in the December 2018 quarter, following a 0.1 percent fall in the September 2018 quarter.

Annual GDP growth for the year ended December 2018 was 2.8 percent.

The size of the economy in current prices was $293 billion.

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