New Zealand’s economy shrank a further 0.9% in the last three months of 2008, according to figures released by Statistics New Zealand this morning.

The drop was in line with economists’ forecasts, which were in the range of a 0.8%- 1.1% drop.

The figure takes the annual rise in GDP for the year to a minimal 0.2%.

The main driver of the drop was in goods producing industries such as manufacturing and construction, which showed an overall decline of 3.9%.

Of the nine manufacturing industries only food, beverage and tobacco showed an increase (up 1.1%). Activity in construction fell 4.4% although non-building construction work - which covers infrastructure such as bridges, roading repairs, electricity and communication networks, increased.

The country’s primary and service industries both showed small increase in activity. – The primary sector activity increased 1.6%, with agriculture, and 4%, the main component of this, and within agriculture, dairying being the principle driver.

Service industry activity also rose, albeit at a much more slight figure of 0.8%. This follows two quarters of shrinkage. Finance, insurance and business services were the main contributor, up 2.2%.

Government administration and defence activity also rose, by 2.3%.
More recent figures released this morning also point to a slowing economy. The February trade balance was a surplus of $489 million.

Within that balance figure though both exports and imports are falling.
The value of the country’s exports was $3.5 billion, down $243 million (6.6%). This is the first fall in exports since August 2007.

The value of imports was $3 billion, down $490 million (14.2%). Imports have been showing a steep decline since September last year.