Business investment rebounds in March 2011 year

Business investment in fixed assets rose 6.7 percent in the March 2011 year Statistics New Zealand said today. This contrasts with falls of 10.3 percent and 16.5 percent in 2009 and 2010.

Total investment (business and government) in fixed assets rose 5.9 percent in the March 2011 year. This was driven by increases in transport equipment, other construction (eg roads and bridges), and residential building. These rises follow falls for all three asset types in the year ended March 2010.

Business profits (gross operating surplus) also rose 4.2 percent in the March 2011 year. This is the first time they have risen above their previous peak in the March 2008 year. The increase in business profits was the largest contributor to a 4.2 percent rise in gross domestic product (GDP) in current prices for the March 2011 year. This increase compares with growth of 1.6 percent in constant prices (the effects of price changes are removed).

National disposable income rose 3.0 percent for the year ended March 2011, while national spending (by households and government) increased slightly more (3.6 percent). National saving is the difference between these two numbers and so can vary between years. National saving fell from $2.0 billion in 2010 to $1.2 billion in the March 2011 year.

Reinsurance payments from the Canterbury earthquakes made New Zealand a net lender to the rest of the world in the March 2011 year. Net lending is the difference between New Zealand’s capital receipts from, and payments to, the rest of the world. Net lending was $4.3 billion in the March 2011 year, a reversal of net borrowing of $3.9 billion in the March 2010 year. This is the first time in over 30 years that New Zealand ‘s capital receipts have been higher than capital payments to the rest of the world.

This is the first release of the national accounts under the new industry classification, ANZSIC06. The classification has been implemented to reflect structural changes in New Zealand’s economy in recent years and to ensure our statistics stay relevant.

See also:
National Accounts: Year ended March 2011 – Information release