NZ growth slows

New Zealand’s GDP stats came out this morning and have undershot expectations.

Economic activity, as measured by gross domestic product (GDP), was up 0.2 percent in the September 2012 quarter, Statistics New Zealand said today. This growth follows revised growth of 0.3 percent in the June 2012 quarter.

The main movements by industry this quarter were:

  • construction (up 4.5 percent), due to increases in residential and non-residential building, with Canterbury featuring in both
  • manufacturing (down 1.1 percent), due to decreases in metal product and food and beverage manufacturing
  • agriculture (down 2.8 percent), falling this quarter after higher than usual growth in the first six months of the year.

“The growth in the latest quarter was driven by construction,” national accounts manager Rachael Milicich said.

Economic activity was up 2.5 percent for the year ended September 2012. Compared with the September 2011 quarter, economic activity was 2.0 percent higher in the September 2012 quarter.

The expenditure measure of GDP was up 0.2 percent in the September 2012 quarter. The main features of this growth were:

  • Household consumption expenditure, which measures the volume of spending by New Zealand households, was flat this quarter (0.0 percent).
  • Investment in fixed assets (down 1.8 percent). Increased investment in residential and non-residential buildings was offset by a large decline in investment in plant, machinery, and equipment.
  • Exports of goods and services (up 4.0 percent), mainly driven by a 27.7 percent increase in the volume of dairy product exports.

The size of the economy (in current prices) was $208 billion for the year ended September 2012.

You can see from the chart below, without construction it would have been a much bigger miss.

Full report from NZ Stats below:


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  1. businesses are under very high pressure thanks to the crazy high Kiwi $

    but nonetheless, house to the moon this year, 7%+ nationwide, and 13% at Auckland, good time to be a Chinese landlord there.

  2. So NZ should sooner or later break, if you have plant machinery investment dropping and everyone poring money into property investment I guess this will only add to pressure for people to pay mortgage/rents as prices go up.

    Because the market in Auckland has been held hostage to corrupt officials that only want to see prices go up the cycle will continue until it breaks.

    Take away Christchurch construction and it would be even worse.

      • Wait, what?!

        If that’s not a silly reason to go with the sheeple, I don’t know what is!

        Point being that “you’re already solvent, before you tie yourself to the mill-stone and jump in the mortgage pond”. You don’t become (more) solvent by joining the lemmings.

        (shakes head) Sorry dude, but there’s more to life than following the dumb over the cliff!

        • let the dump walk over you if you like it that way, they are in control, going against the trend is 99% of time a losing proposition.You need plenty of dump luck to be a good contrarian.

          to each of his own

          • ‘dam’……………………
            If the result is inevitable, why do you feel it necessary to come on here to spin your tired rhetoric?

            With every post you make it only strengthens my view that property is dead man walking. 😀

          • @Chris
            and if you really consider PF as a spruiker you must have a serious case of victim’s syndrome.

            keep you eyes open and get on with the program

          • @chris

            I am a realistic, I used to have few kg of gold, some nice TD, few shares (asx top 5) waiting for the 40% crash.

            I happily got rid of all, and bought few properties (but i am still renting), and it was a great decision.Only idiots do not change of opinion.

          • Patience is a virtue! I only see signs of things getting worse so logic dictates that I dont pull up stumps and do the exact opposite of what I know is right.

            Besides, no skin off my nose if you wanted to liquidate your shares and gold and bet everything on black (housing)… You clearly have an insight most dont…. ::)

          • @chris
            no patience is not virtue in many cases, i dont know your age but i ve reached 40, and each year I have at least 7% less working life and therefore purchasing/borrowing power.I needed to act.

            time counts, you cannot sit on the fence with hope, hope is not a financial strategy.

            I dont have any particular insight but gold is getting nowhere and in waiting for a reverse to mean, TD is getting less and less interesting and shares are for suckers (rigged games/ shitty long term returns once you factor survivor bias).Property was the best of the worst choices, protected at all cost by the government, with strong immigration, lower and lower rates, regulations, and will become worthless like stocks can potentially be.Look at whats going on in NZ, it s not all because of Christchurch, property booms there, will happen to some level here as well once we reach 2-3% rates, no doubt, I ma trying to get few properties before the rates drop too low.

    • you have to remember, its not the market versus crazy house prices. Its the market versus:
      – govt policy wanting to maintain crazy house prices with everything at it disposal
      – central bank policy wanting to maintain crazy house prices via everything at its disposal
      – free money from overseas wanting to maintain an unsustainable debt load for as long as possible.
      – free market versus humans who feel they have no choice but to go where the govt is telling them to go in terms of irrational investment decisions with terribly low yields.

      …. it will break one day, but don’t underestimate the ability of govts to socialise losses on to those who don’t deserve it. A badly run business can survive if you steal money from profitable businesses. Thats the reality people are faced with nowadays.

      • Squirrell ‘it will break one day……..’
        I rather liked Eric Janszen’s ( remark in regard to these things

        “If we’ve learned anything by running this site since 1998 it’s that even the most clearly foreseeable disaster in the making takes longer to arrive than the cruelest imagination can conceive.” Eric Janszen