Chch rebuild and drought lead to modest economic growth

Canterbury rebuild and drought lead to modest economic growth – Media release

20 June 2013

Gross domestic product (GDP) rose 0.3 percent in the March 2013 quarter, with the Canterbury rebuild and the 2013 drought having offsetting effects, Statistics New Zealand said today. This modest growth in economic activity follows a rise of 1.5 percent in the December 2012 quarter.

"The Canterbury rebuild boosted activity for construction and related services," GDP project manager Jason Attewell said. "The rest of the economy was a mixed bag, but we are coming off very strong growth in the previous quarter."

The largest movements by industry this quarter were:
• Business services (up 3.9 percent), driven by architectural and engineering services in Canterbury and Auckland. Activity related to the census, which was held in March 2013, is also included in this industry.
• Construction (up 5.5 percent), due to residential building and associated construction services activity in Canterbury.

Partly offsetting these increases were declines in:
• Agriculture (down 4.7 percent), due to dry weather in the quarter, which meant that dairy stock were dried off early resulting in lower milk production.
• Information media and telecommunications (down 3.1 percent), due to declines in call minutes between December and March.

"The impact of the drought showed up as expected, with lower milk production and higher slaughter numbers for the first three months of 2013," Mr Attewell said. "We expect the drought will impact on the economy for several quarters, as lower herd numbers and conception rates will affect future production."

Economic activity for the year ended March 2013 was up 2.5 percent.

The expenditure measure of GDP was also up 0.3 percent in the March 2013 quarter. The main features of this growth were:
• Household expenditure, which measures the volume of goods and services consumed by households, rose 0.4 percent. This has not fallen since the March 2009 quarter, and has grown 10.1 percent over that time.
• Investment in fixed assets rose 0.3 percent, with a rise in residential building partly offset by a fall in plant and machinery investment.

For more information about these statistics:

-Visit Gross Domestic Product: March 2013 quarter
-http://img.scoop.co.nz/media/pdfs/1306/GrossDomesticProductMar13qtr.pdf
-http://img.scoop.co.nz/media/pdfs/1306/gdpmar13alltables.xls

ENDS

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