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It is not unusual for Statistics New Zealand to play down the significance of its figures.
Statisticians are conservative beasts by nature and anyone doing any measuring of New Zealand’s economic performance has long since learned to treat most numbers as being a tad provisional.
So when this morning’s GDP figure turned out to be unexpectedly in the black, but only by 0.1%, Statistics New Zealand in effect put a health warning on the result.
“Because this movement is so close to zero, no significant conclusions can be drawn that this is a turning point,” was the warning put on the release by the department.
That is probably being too cautious.
“I know why they did it and fair enough, but I think Statistics New Zealand might have done a bit of disservice in playing down the figure,” says Bank of New Zealand head of market economics Stephen Toplis.
The important factor is the economy has improved. GDP has been posting negative quarterly results since March 2008 and after a series of -0.3%; -0.5%; -0.5%; -0.1%; and -0.8%; a move into positive territory is significant.
“This is a very clear indication we have reached a turning point,” Mr Toplis said.
“It’s a genuine positive in that regard. And we definitely think we will build on that in the next two quarters.”
The New Zealand dollar, which these days always appears to be looking for an excuse to surge ever higher, immediately did so in the wake of the result.
The currency spiked from $US0.7190 to $US0.7312 late this morning, before settling down to levels still above $US0.71.
But within today’s result, some parts of the economy are still in trouble. The high dollar has not stopped the primary sector growing – although it has not grown as well as it might have.
But export volumes have been increasing and primary industries grew 1.5% over the quarter – mostly driven by fishing, forestry and mining, up 4%.
Output from goods producing industries however declined 0.5%.
However secondary industry is hurting, showing its sixth quarterly contraction, with manufacturing and construction the main contributors.
One other factor to remember though is today’s figure is for the June quarter and is nearly three months old. Economists have been almost universally picking a move into positive GDP in either the third or fourth quarter this year and will now be revising their outlook upwards.