GDP grows 0.7%

Stats NZ reported:

Gross domestic product (GDP) increased 0.7 percent in the March 2016 quarter, following an increase of 0.9 percent in the December 2015 quarter, Statistics New Zealand said today. The latest growth was driven by the construction and health industries, but partly offset by decreases in the primary industries and manufacturing.  

“The main driver behind the GDP growth was construction, which rose 4.9 percent. This was the strongest quarterly growth for the industry since March 2014,” national accounts senior manager Gary Dunnet said.

The increase in construction also reflected higher construction-related investment. Investment in other construction (infrastructure such as roading and telecommunications) was up 12 percent – the highest quarterly growth since June 2014. Investment in residential building rose 4.2 percent, driven by strong increases in Auckland and Waikato, but eased in Canterbury.

Rising demand saw service industries grow 0.8 percent this quarter. The health and retail trade industries led the overall increase.

“We saw a larger population reflected in the rise in health care and consumer spending. When the rising population is taken into account, our GDP per capita rose 0.1 percent on the previous quarter,” Mr Dunnet said.

Strong tourist arrivals also supported the growth in service industries, reflecting a 4.9 percent rise in tourist spending.

That’s reasonable growth.  Bill English pointed out:

New Zealand’s annual growth rate of 2.8 per cent was in the top 10 of the OECD. It compares to 2.0 per cent in the United Kingdom and United States, 3.1 per cent in Australia, 1.1 per cent in Canada and 1.8 per cent across the OECD.

And we’re one of the very few countries with the books in surplus!

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