Economy shrinks 0.9% in December quarter

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.

 


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NZ Market Snapshot

Forex

Sym Price Change
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AUD 0.9488 0.0000 0.00%
EUR 0.6318 0.0000 0.00%
GBP 0.5517 0.0000 0.00%
HKD 5.5057 0.0000 0.00%
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Symbol Open High Last %
NZX 50 7434.5 7441.6 7434.5 0.10%
NASDAQ 6207.0 6211.5 6205.3 0.08%
DAX 12604.4 12611.5 12621.7 -0.15%
DJI 21070.2 21092.8 21083.0 -0.01%
FTSE 7517.7 7554.2 7517.7 0.40%
HKSE 25671.0 25724.4 25630.8 0.03%
NI225 19798.5 19801.6 19813.1 -0.64%
ASX 5789.6 5789.6 5789.6 -0.65%