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New Zealand GDP Falls 2.2% On Year In Q3

New Zealand GDP Falls 2.2% On Year In Q3

New Zealand’s gross domestic product dropped 2.2 percent on year in the third quarter of 2020, Statistics New Zealand said on Thursday.

That missed expectations for a decline of 1.3 percent following the 12.4 percent annual drop in the three months prior.

On a quarterly basis, GDP surged a record 14.0 percent – exceeding expectations for an increase of 13.5 percent after tumbling 12.2 percent in the previous three months.

The service industries rose 11.1 percent on quarter, while goods-producing industries surged 26.0 percent and primary industries were up 4.6 percent.

GDP per capita rose 13.8 percent, while real gross national disposable income was up 13.9 percent

Expenditure on gross domestic product increased 15.6 percent in the September 2020 quarter. Driving this was household consumption expenditure and gross fixed capital formation, up 14.8 and 27.1 percent, respectively.

Household spending increased 14.8 percent in the September 2020 quarter, with increases across all expenditure categories, however it was down 1.4 percent for the year to September 2020. Spending on durables, non-durables, and services was up significantly over the quarter. All classes within the durable goods category increased this quarter, led by new and used vehicles, and audio-visual equipment.

Spending within services was driven by a number of classes, with significant increases seen in restaurants and ready-to-eat meals, and domestic air passenger services, both of which had seen significant declines in the June 2020 quarter. For the year ended September 2020, spending on services was down 3.3 percent, but spending on durables and non-durables was up 0.1 and 1.0 percent respectively.

Imports of goods and services recorded an increase of 10.6 percent in the September 2020 quarter, driven by a 16.2 percent increase in imports of goods. This was due to increased demand for intermediate goods such as primary fuels and lubricants. Imports of capital goods and consumption goods also increased, primarily led by increases in machinery and plant, and durable goods respectively.

Exports of goods and services increased 4.9 percent, driven by an increase of 6.4 percent to goods exports. Contributors to the increase included metal products, machinery and equipment; agriculture and fishing primary products; meat products; and forestry primary products.

Expenditure on gross fixed capital formation increased 27.1 percent over the quarter, with all components showing increases. The main contributor to growth was residential building, up 42.0 percent. However, on an annual basis, residential building was down 4.9 percent over the year to September 2020. Annual growth in gross fixed capital formation for the year to September 2020 was down 6.2 percent.

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