New Zealand economy grows 0.2 percent

Economic activity, as measured by gross domestic product (GDP), was up 0.2 percent in the December 2010 quarter, Statistics New Zealand said today. This increase in economic activity follows a fall of 0.2 percent in the September 2010 quarter. 

"The small increase in GDP this quarter is the result of a mixed picture across industries," national accounts manager Rachael Milicich said. "A rebound in manufacturing activity this quarter has been mostly offset by falls in other parts of the economy."

Notable movements by industry in the December 2010 quarter were:

• manufacturing, up 2.5 percent, mainly due to metal product and machinery and equipment manufacturing
• real estate and business services, up 0.9 percent, mainly driven by business services
• forestry and logging, up 6.6 percent, reflecting continued overseas demand for New Zealand logs
• wholesale trade, down 2.7 percent, following four quarters of growth
• retail, accommodation, and restaurants, down 2.1 percent.

The expenditure measure of GDP was up 0.4 percent in the December 2010 quarter, following a fall of 0.3 percent in the September 2010 quarter. Notable movements this quarter were: 

• the volume of goods and services purchased by New Zealand households was up 0.2 percent
• investment in fixed assets was up 4.8 percent, due to increases in transport equipment and non-residential building investment
• imports of goods rose 7.0 percent, the largest increase since the March 2004 quarter
• exports of goods rose 4.1 percent, mainly due to higher volumes of dairy and meat products exported.

GDP for the year ended December 2010 was 1.5 percent higher than for the year ended December 2009, while real gross national disposable income (RGNDI) increased 4.6 percent over the same period. GDP measures the volume of goods and services we produce, while RGNDI is a broad measure of the volume of goods and services we have command over. The main difference between GDP and RGNDI for the year ended December 2010 was due to a $3,560 million inflow of reinsurance transfers from the rest of the world, related to the September 2010 Canterbury earthquake.

A note on how the Canterbury earthquakes of September 2010 and February 2011 affect GDP is included in the commentary section of the Gross Domestic Product: December 2010 quarter information release.