Statistics New Zealand has just released New Zealand national accounts figures for the December quarter of 2014, with Gross domestic product (GDP) rising by 0.8% over the quarter to be up 3.3% year-on-year – the highest growth since 2007. The result followed a revised 0.9% rise in the September 2014 quarter.
The main movements by industry were:
- retail trade and accommodation up 2.3%, due to increased tourist spending;
- rental, hiring, and real estate services up 1.2%, due to more house sales;
- financial and insurance services up 1.1%, due to increased banking activity;
- manufacturing up 1.0%, due to an increase in petroleum, chemical, polymer, and rubber product manufacturing; and
- electricity, gas, water, and waste services down 2.5%, due to lower hydro-electricity generation.
The expenditure measure of GDP rose 1.1 percent in the December 2014 quarter, following a revised 1.1 percent increase in the September 2014 quarter.
The main movements in the expenditure measure of GDP this quarter were:
- household consumption expenditure up 0.6%, due to increased spending on services and durable goods;
- exports of goods and services up 6.1%, driven by increased spending from overseas visitors;
- inventories built up $409 million, due to manufacturing and distribution inventories;
- investment in fixed assets up 0.2%, due to increases in residential building and software, which were partly offset by declines in non-residential building and transport equipment.
However, while GDP is booming, real incomes suffered their first fall since the June 2012 quarter, with real gross national disposable income (RGNDI), which measures the real purchasing power of New Zealand’s disposable income, falling 0.5% in the December 2014 quarter.
The fall in RGNDI was driven by falling dairy prices, which caused a 1.9% fall in the merchandise terms of trade. Nevertheless, RGNDI was up 5.0% over the year, easily outpacing GDP growth of 3.3%.
Expect more Kiwis to flood back home to the relative economic sunshine of New Zealand. Hell, a few Aussies might even join them.
