GDP shows the recovery is continuing...slowly
The recovery continues, with GDP rising 0.6% in the March quarter, Statistics New Zealand announced this morning.
The increase was slightly above the consensus market forecast of 0.5% but should cause few surprises.
The rise followed a rise of 0.9 percent in the December quarter and means GDP has grown for four consecutive quarters, following five consecutive quarters of decline.
The increase in economic activity is focussed on primary and manufacturing sectors, with the services sector remaining flat.
Activity in the primary sector rose 1.7%, mostly due to increases in forestry, mining and agriculture.
Manufacturing is up 1.6%, with 7.7% rises in machinery and equipment manufacturing and 7.2% rises in metal product manufacturing.
The recovery though still has some way to go.
“Economic activity is still below the level seen before the recession, particularly for manufacturing and construction,” said Statistics New Zealand’s acting national accounts manager Jason Attewell.
The signals for a key economic indicator – business investment – are somewhat mixed. After two quarters of decline business investment in fixed assets rose 0.9%. Inventory build up is also continuing to rise: up $143 million, following an even larger rise of $221 million the December quarter.
Investment in plant and machinery, however, is down, 0.3% for the quarter.
Government spending increased 1.7% for the quarter, although this was boosted because the Royal New Zealand Navy bought a new boat. If the $93 million patrol vessel HMNZS Otago is stripped out of the figures, the increases was 0.8% for the quarter and 1.4% for the year.