Data released by Stats NZ today shows that the economy grew on a quarterly basis by 0.8% but fell on an annual basis by 1.1% said NZCTU Te Kauae Kaimahi Economist Craig Renney. “This is positive data for the first quarter of this year, but the fact that the economy is about the same size it was in March 2023 tells you that essentially we have had almost zero economic growth (0.3%) over the past two years.”
“GDP per capita ($52,872) is now lower than it was in March 2022 ($53,100). It took another fall on an annual basis of 2.4%. There were falls in 11 of the 16 sectors of the economy annually – led by construction (-9.3%), wholesale trade (-3.6%) , and business services (-2%). Both goods producing industries and service industries saw contraction this year.”
“The data shows that workers incomes aren’t keeping up with profits. Stats NZ shows that compensation of employees rose 1.5% this quarter before inflation. Gross operating surplus and gross mixed incomes (a broad measure of profit) rose 2%. Employee compensation was revised down in the December quarter to -0.2%.”
“The lack of business confidence in the economy is present in the business investment data. Business investment fell this year. Non-residential building investment fell 2.9%. Transport equipment purchases fell 6%. Households are feeling it to, with purchase of durable goods being lower than they were in December 2023,” Renney said.
“This data shows us how far we fell over the past year in economic terms. The growth in GDP this quarter is welcome – but the economy is still smaller than at the election in real terms. With more recent data suggesting that the economy is struggling to grow, there is a real danger that we return to slow, no, or negative growth.”
“It’s time for the Government to realise that its economic growth plan isn’t working. There are 23,000 more people on Jobseekers this year. 48% of workers in New Zealand got a pay cut in real terms. Business and consumer confidence are at levels associated with recessions. One quarter of data shouldn’t blind the government of the need for change.”
