Weak growth in New Zealand economy

Economic activity, as measured by Gross Domestic Product (GDP), was up less than 0.1 percent in the June 2009 quarter, Statistics New Zealand said today. This growth in economic activity follows five quarters of contraction in the New Zealand economy.

Activity in the primary industries was up 1.5 percent in the June 2009 quarter, mainly driven by forestry and logging (up 8.0 percent). The increase in forestry and logging production was related to an increase in exports of logs to the People's Republic of China.

Activity in the goods-producing industries contracted 0.5 percent in the June 2009 quarter. The manufacturing (down 1.3 percent) and construction (down 1.9 percent) industries both declined. A 5.9 percent increase in electricity, gas and water partly offset these declines.

Activity in the services industries was flat this quarter. Service industries that increased were real estate and business services (up 1.5 percent) and communications (up 1.7 percent). Offsetting these increases were declines in wholesale trade (down 2.1 percent), transport and storage (down 3.3 percent), and government administration and defence (down 0.4 percent).

The expenditure measure of GDP, released concurrently with the production measure, was up 0.4 percent in the June 2009 quarter. Household consumption expenditure, which measures the volume of spending by New Zealand households, was up 0.4 percent. This increase in household spending was driven by non-durables (mainly motor fuel) and services. Household spending on durable items fell.

Export volumes were up 4.7 percent in the June 2009 quarter, with exports of dairy and wood products the main contributors. Import volumes decreased 3.8 percent in the same period, with the largest declines in intermediate goods, and machinery and plant equipment. The combination of higher exports, lower imports, and a decline in manufacturing led to a large, $1.1 billion run down in inventories.