NZ economy expands at fastest pace in two years   25 Mar 2010

Businesswire– New Zealand’s economy accelerated in the fourth quarter, growing at the fastest clip in two years as manufacturing revived and companies built up inventories that had run down through the recession.

Gross domestic product expanded 0.8% in the final three months of 2009, according to Statistics New Zealand, matching the median in a Reuters survey. Growth in the third quarter was revised up to 0.3% from 0.2%.

The data confirms the New Zealand economy’s recovery is picking up pace after emerging from recession in the second quarter last year. While the pace of growth in the fourth quarter was faster than the central bank’s 0.6% estimate this month, economists say it keeps Governor Alan Bollard on track to start raising interest rates mid-year.

“The economy is beginning to show genuine signs of life,” said Stephen Toplis, head of research at Bank of New Zealand. “It’s further confirmation that we’re clawing our way out of the mire, and can expect the next quarter to be about the same, or a little bit less.”

Manufacturing activity expanded 4.5%, snapping seven quarters of decline, led by food and beverages. Wholesale trade climbed 2.7%, also after falling for seven straight quarters. Retail, accommodation and restaurants gained 1.7%

“Manufacturing is benefitting from the strength of the Australian economy and the Aussie-Kiwi cross rate at the moment, and New Zealand demand is starting to pick up, although it’s coming off an awfully low base,” Toplis said.

Australia’s economy, the biggest market for New Zealand exports, skirted recession last year, helped by demand for raw materials from China. At the same time, the kiwi dollar has sunk to a 10-year low against its counterpart across the Tasman, making the nation’s products relatively more competitive.

The kiwi recently traded at 77.18 Australian cents, from 77.31 cents before the GDP data. The New Zealand dollar was at 70.18 U.S. cents, from 70.20 cents.

The economy expanded 0.4% in the fourth quarter from a year earlier, compared to a 0.3% pace in the Reuters survey.

Inventories grew by $172 million in the latest quarter, after running down over the previous nine months, reflecting restocking in anticipation of increased demand.

Household consumption spending grew 0.9%.

Bollard this month predicted the recovery will be “subdued relative to previous recoveries” with households still cautious and business spending weak “despite much improved confidence.”

The economy still faces headwinds. Unemployment is sitting at a decade-high 7.3%, workers are feeling less confident about their current circumstances and property investors are looking ahead to the Budget with fear about the extent to which their tax breaks will be eliminated.

Among indicators of consumer activity, figures this month showed spending debit and credit cards fell 0.4% in February, while January core retail sales were weaker than expected.

The GDP deflator rose 1.6% in 2009, the government statistician said.

(BusinessWire)

Add a comment

Bookmark and Share

News

New Zealand reaffirms support for Flight MH17 judicial process

7 Mar 2020 News By Rt HON WINSTON PETERS
Ahead of the start of the criminal trial in the Netherlands on 9 March, Foreign Minister Winston Peters has reaffirmed the need to... more

Record transport investment NZ$54million announced

19 Mar 2020 News By Hon Phil Twyford
$54 billion to be invested in transport over 10 years. No petrol excise or road user charge increases proposed. Record investment in... more

Business

NZ Government's Economic package to fight COVID-19

17 Mar 2020 Business News By RT HON JACINDA ARDERN
The Coalition Government has launched the most significant peace-time economic plan in modern New Zealand history to cushion the... more

NZ Government announces aviation relief package

19 Mar 2020 Business News By Hon Phil Twyford
Transport Minister Phil Twyford today outlined the first tranche of the $600 million aviation sector relief package announced earlier... more

Living

Hawke's Bay wins big at the New Zealand Wine Awards

15 Nov 2019 Food & Wine
A Hawke’s Bay Syrah has won the New Zealand Wine of the Year™ Champion 2019 trophy, while a Hawke’s Bay winery has... more

Wagner Opera and fire dancing Samoans aim to raise awareness around knife crime in London

16 Nov 2019 Arts
Wielding innovation whilst upholding tradition needs knife-like precision to be effective, and that’s what Wandsworth-based... more

Property

Fairer rules for tenants and landlords

17 Nov 2019 Property By Minister Kris Faafoi
17 NOVEMBER 2019 The Government has delivered on its promise to the over one million New Zealanders who now rent to make it fairer... more

New Zealand Government will not implement a Capital Gains Tax

17 Apr 2019 Property By RT HON JACINDA ARDERN
The Coalition Government will not proceed with the Tax Working Group’s recommendation for a capital gains tax, Jacinda Ardern... more

Migration

Boosting border security with electronic travel authority – now over 500,000 issued

19 Nov 2019 Migration By Hon Iain Lees-Galloway
19 NOVEMBER 2019 We’ve improved border security with the NZeTA, New Zealand Electronic Travel Authority, which helps us to... more

Christchurch reinstated as refugee settlement location

18 Aug 2018 Migration
18 AUGUST 2018 HON IAIN LEES-GALLOWAY The announcement that Christchurch can once again be a settlement location for refugees... more

Travel

Gallipoli Anzac Day services cancelled

19 Mar 2020 Travel & Tourism By RT HON JACINDA ARDERN
The New Zealand and Australian Governments have announced this year’s joint Anzac Day services at Gallipoli will be cancelled... more

New Zealanders advised not to travel overseas

19 Mar 2020 Travel & Tourism
New Zealanders advised not to travel overseas more

Sport

The Skipper's Diary: Sir Richard Hadlee honouring his father and NZ's Forty-Niners

27 Oct 2019 Cricket By Charlotte Everett
NZNewsUK London Editor Charlotte Everett spoke to Sir Richard Hadlee about why he’s chosen to publish his father’s... more

PREVIEW: All Blacks v England semi-final

26 Oct 2019 Rugby
The two most convincing quarterfinals winners are set to square off in a semifinal showdown for the ages when the All Blacks meet old... more

Columns

Gordon Campbell on the Gareth Morgan crusade

11 Nov 2016 Opinion
Gordon Campbell on the Gareth Morgan crusade First published on Werewolf The ghastly likes of Marine Le Pen in France and Geert ... more

Gordon Campbell on the US election outcome

10 Nov 2016 Opinion
Column - Gordon Campbell   Gordon Campbell on the US election outcome Well um.. on the bright side, there (probably)... more

Kiwi Success

Congratulations to Loder Cup winner

26 Sep 2018 People By Hon Eugenie Sage
25 SEPTEMBER 2018 The Loder Cup, one of New Zealand’s oldest conservation awards, has been awarded to Robert McGowan for 2018... more

Appointments to New Zealand National Commission for UNESCO

16 Aug 2018 Appointments
16 AUGUST 2018Appointments to New Zealand National Commission for UNESCO HON JENNY SALESA Associate Education Minister Jenny Salesa is... more

Recruitment

Historic pay equity settlement for education support workers

14 Aug 2018 Recruitment By RT HON JACINDA ARDERN
14 AUGUST 2018Historic pay equity settlement for education support workers RT HON JACINDA ARDERN HON CHRIS HIPKINS Prime Minister The... more

Historic pay equity settlement for education support workers

22 Aug 2018 Recruitment By RT HON JACINDA ARDERN
14 AUGUST 2018Historic pay equity settlement for education support workers RT HON JACINDA ARDERN HON CHRIS HIPKINS Prime Minister The... more