NZ economy expands less than expected in fourth quarter
New Zealand's economy expanded less than expected in the fourth quarter, weighed by weaker activity in the primary sector. The kiwi dollar fell.
Gross domestic product expanded 0.4% in the three months ended December 31, following a revised 0.8% increase in the September quarter, Statistics NZ said. Economists had tipped growth quarterly growth of 0.75% in a BusinessDesk poll. The economy grew 2.7% from the same period a year earlier.
"Growth in service industries was partly offset by weaker activity in primary industries also flowing through into manufacturing," national accounts senior manager Gary Dunnet said. The services sector expanded 0.7% while activity in the primary industries fell 1.0%.
The New Zealand dollar fell to 70USc from 70.37USc immediately before the data release.
Agricultural activity fell 0.6%, due to falling milk production while forestry and logging activity decreased 5.1% and mining activity fell 2.3% in the December quarter.
Activity in goods-producing industries fell 0.3% on the quarter, with manufacturing down 1.6% due to decreased food, beverage and tobacco product manufacturing, the statistics agency said. Meat manufacturing and dairy product manufacturing also fell.
Construction activity, however, continued to increase, rising 1.8% in the December quarter. Residential and non-residential building were both up, which was also reflected in an increase in construction trade services.
Services, however, was the main driver of growth in the quarter, with business services activity rising 1.7% and arts, recreation and other services lifting 3.8%.
Activity in the service industries makes up about 70% of GDP, while activity in the primary industries makes up about 10%.
Per capita GDP growth, meanwhile, remained anaemic, falling 0.2% in the December quarter after a revised 0.3% increase in September. It was up 0.9% in the year ended December 31.
Real gross national disposable income per capita, which measures the buying power of New Zealand's disposable income, was up 2.3% in the December quarter following a revised 0.4% gain in the September quarter. Over the year, it rose 2.0%.
On an expenditure measure, GDP rose 0.2% in the December quarter, following a revised 0.9% increase in the September quarter.