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Source: MIL-OSI Submissions

Services drive GDP growth – Media release

19 March 2020

Gross domestic product (GDP) grew 0.5 percent in the December 2019 quarter, after a 0.8 percent rise in the previous quarter, Stats NZ said today.

“Growth this quarter was led by a 0.6 percent rise in the service industries, while primary industries grew 0.5 percent,” national accounts senior manager Ruvani Ratnayake said.

“Growth was mixed at the industry level, with 11 of the 16 industries recording increases.”

Rental, hiring, and real estate led growth in the service industries with a 1.1 percent rise. Public administration and safety (up 2.8 percent) was another notable contributor. Transport, postal, and warehousing was also up 1.5 percent.

“Mining led the growth in the primary industries sector,” Ms Ratnayake said.

Goods-producing industries grew 0.1 percent in the December quarter, driven by increases in electricity, gas, water, and waste services, and construction. Offsetting these increases was a fall in manufacturing.

Household spending grew 0.3 percent this quarter, as annual growth slowed to its lowest level in six years, at 2.7 percent.

“Reduced spending on short shelf-life goods such as food, beverages, and tobacco slowed the growth in household consumption this quarter,” Ms Ratnayake said.

GDP per capita rose 0.2 percent this quarter, following a 0.5 percent increase in the September 2019 quarter.

Annual GDP growth for the year ended December 2019 was 2.3 percent, compared with a 3.2 percent growth in the year ended December 2018.

Annual growth in GDP has been slowing since December 2016 when it was 3.9 percent. From the December 2016 year, annual growth in the services industries (which make up about two-thirds of the economy) halved from 4.1 percent to 2.1 percent in the December 2019 year.

The size of the economy in current prices was $311 billion.

The spread of COVID-19 in early 2020 will not have affected this quarter’s statistics as it occurred after the period covered by this release. The impacts of COVID-19, along with the drought and drought-relief package announced by Government on 12 March, will be seen in the March 2020 quarter results, due for release on 18 June 2020.

MIL OSI