NZ: A centrist GDP outcome - BNZ

According to Craig Ebert, Senior Economist at BNZ, New Zealand’s economic activity remains bumpy in its componentry. However, overall, it continues to make its way forward at a creditable pace (as do the leading indicators of growth, going into Saturday’s election), he further adds.

Key Quotes

“June quarter production GDP expanded 0.8%. This was in line with market expectations, and ours. As was the annual growth result, of 2.5% (even with a slight upgrade to March quarter growth itself – to 0.6%, from 0.5%).” 

“As solid as this appeared, there will no doubt be those still questioning just how strong the GDP accounts really are. In this we acknowledge that per capita GDP growth in Q2, for instance, was 0.3%, and 0.4% at an annual rate. This was even with the one-off benefits from the major sports events that New Zealand hosted in the June quarter. And even the big increase in goods exports in Q2 was mainly catch-up from a poor run over prior quarters.”

“The 0.8% increase in Q2 GDP, overall, also harboured further slippage in construction activity, a reduction in onfarm output, a third successive fall in mining activity, and was aided by an outsized 1.8% expansion in central government services (+4.8% y/y).”

“Nonetheless, there seems plenty of momentum in many other areas of the economy to keep GDP expanding at a respectable clip – and enough to keep pressure on the supply side of the economy.”