All references to quarterly movements are to seasonally adjusted chain-volume series expressed in 1995/96 prices unless otherwise stated.
Economic activity increases
Economic activity increased 0.1 percent in the June 2009 quarter, the first quarterly increase in gross domestic product (GDP) since the December 2007 quarter. Because this movement is so close to zero, no significant conclusions can be drawn that this is a turning point. Economic activity for the year ended June 2009 contracted 1.8 percent compared with 2.5 percent growth for the year ended June 2008. This is the largest annual contraction in economic activity since the series began in June 1987.
Activity in primary industries increased 1.5 percent this quarter. This increase was mainly driven by the fishing, forestry, and mining industry (up 4.0 percent).
Activity in goods-producing industries decreased 0.5 percent in the June 2009 quarter, the sixth quarterly contraction. The decrease was driven by manufacturing (down 1.3 percent) and construction activity (down 1.9 percent). A 5.9 percent increase in electricity, gas and water partly offset these decreases.
Service industries were flat this quarter. Increases in real estate and business services (up 1.5 percent) and communications (up 1.7 percent) were offset by declines in wholesale trade (down 2.1 percent), transport and storage (down 3.3 percent), and government administration and defence (down 0.4 percent).
The expenditure-based measure of GDP, released concurrently with the production-based measure, was up 0.4 percent in the June 2009 quarter.
Household consumption expenditure increased 0.4 percent in the June 2009 quarter. Services and non-durable goods both increased, up 0.6 percent and 0.8 percent, respectively. Expenditure on durable items decreased (down 0.9 percent). In the year ended June 2009, household consumption expenditure decreased 1.1 percent.
Gross fixed capital formation, which measures investment in fixed assets, was up 0.1 percent in the June 2009 quarter. Business investment increased 1.3 percent, mainly due to a 6.3 percent rise in intangibles and a 2.9 percent rise in other construction.
Total exports volumes increased 4.7 percent in the June 2009 quarter, mainly driven by an increase in exports of dairy products (up 20.9 percent). Total import volumes were down 3.8 percent, with intermediate goods (down 6.1 percent), and capital goods (down 3.5 percent) making the largest contributions.
Gross domestic product by industry
Primary industries
Primary industry activity increased 1.5 percent in the June 2009 quarter following a 0.6 percent increase in the March 2009 quarter.
Forestry and logging (up 8.0 percent) was the main driver of the increase in primary industry activity this quarter. The increase in forestry and logging activity is related to an increase in exports of logs to the People's Republic of China. On the expenditure side of GDP, exports of wood and paper products were up 6.9 percent.
Mining was up 2.3 percent this quarter, mainly due to increased oil extraction. The Maari oil field, which commenced production in the March quarter, reached full production in the June 2009 quarter. Agriculture also increased, up 0.5 percent this quarter.
For the year ended June 2009, activity in primary industries decreased 0.9 percent.
Goods-producing industries
Activity in goods-producing industries decreased 0.5 percent in the June 2009 quarter, the sixth consecutive quarterly decrease. Manufacturing was the main contributor to the decrease.
Manufacturing activity declined 1.3 percent this quarter. The largest declines within manufacturing came from: machinery and equipment manufacturing (down 7.3 percent), non-metallic mineral manufacturing (down 11.7 percent), and food, beverage and tobacco manufacturing (down 1.5 percent). An increase in petroleum, chemicals, plastics and rubber manufacturing partly offset these decreases.
Electricity, gas and water increased 5.9 percent this quarter, mainly due to electricity generation. The demand for electricity was high due to a colder than usual winter. High lake levels meant that more demand was met through hydro-electricity generation.
Construction activity decreased 1.9 percent in the June 2009 quarter following a 0.4 percent increase in the March 2009 quarter. The decrease in construction activity was mainly due to declines in construction trade services (down 3.6 percent) and residential building construction (down 6.2 percent). Construction trade services measures the services (ie sub-contractors) required for residential and non-residential building projects, and is the largest component of construction activity. Non-building construction was up 1.9 percent this quarter, driven by large infrastructure projects.
For the year ended June 2009, activity in goods-producing industries decreased 7.6 percent. This is the largest annual decline since the series began in June 1987. Goods-producing industries were down 9.9 percent in the June 2009 quarter compared with the June 2008 quarter.
Service industries
Activity in the service industries was flat in the June 2009 quarter following a similar movement in the March 2009 quarter.
In the service industries, finance, insurance and business services (up 0.6 percent) had the largest increase this quarter. Within this industry, real estate and business services increased 1.5 percent, while finance and insurance services declined 0.9 percent. The increase in real estate and business services was driven by increased house sales and more hours worked in the business services industries. Communication services, which includes telecommunication and postal services, was up 1.7 percent this quarter.
---PDF BREAK---
Other service industries that declined this quarter were wholesale trade (down 2.1 percent) and transport and storage services (down 3.3 percent). General government administration and defence had its largest decline since the December 2002 quarter, down 0.4 percent this quarter. The main driver of this decrease was central government administration and defence (down 1.8 percent), while local government was up. Within central government, the administration, defence, and public order and safety industries all declined.
For the year ended June 2009, service industries were up 0.6 percent compared with growth of 3.2 percent for year ended June 2008.
Unallocated items
Unallocated items include taxes and items that are not allocated to any specific industry. These items are: the financial service charge, the seasonal adjustment balancing item, and taxes that are levied on the purchaser not the producer (such as GST and import duties). Unallocated items were up 3.5 percent in the June 2009 quarter.
Expenditure on gross domestic product
Expenditure on GDP increased 0.4 percent in the June 2009 quarter. For the year ended June 2009, expenditure on GDP decreased 1.2 percent. While the production- and expenditure-based measures are both official series, the production-based measure has historically shown less volatility and is the preferred series for quarter-on-quarter changes.
Households
Household final consumption expenditure increased 0.4 percent in the June 2009 quarter, the first increase in household spending since the December 2007 quarter. For the year ended June 2009, household consumption expenditure fell 1.1 percent. Household consumption expenditure measures the volume of spending by New Zealand-resident households on goods and services.
Household expenditure on services increased 0.4 percent in the June 2009 quarter. The main contributors to the increase in household spending were health and medical services, and other goods and services (such as phone and postal services).
Expenditure on non-durables increased 0.8 percent in the June 2009 quarter. Household expenditure on motor fuels, and food and beverages were the main contributors to the increase.
Household expenditure on durables decreased 0.9 percent for the June 2009 quarter. This is the third consecutive quarterly decrease for durables. Decreased household spending on new vehicles, and personal supplies and goods were the main contributors to the fall in durables in the latest quarter. For the year ended June 2009, durables decreased 3.4 percent.
Residential building decreased 2.6 percent in the June 2009 quarter. In level terms, residential building construction is the lowest it has been since the September 2001 quarter. For the year ended June 2009, residential building declined 24.9 percent.
Business investment
Business investment in fixed assets increased 1.3 percent in the June 2009 quarter, following three consecutive quarters of decline. For the year ended June 2009, business investment in fixed assets decreased 8.2 percent compared with an increase of 4.3 percent for the year ended June 2008.
Investment in intangibles was up 6.3 percent in the June 2009 quarter with the main contributions coming from investment on software and exploration. The increase in software investment was driven by an increase in imports of software, while exploration investment was up due to an increase in metres drilled. Other construction also increased this quarter (up 2.9 percent), with investment in infrastructure the largest contributor.
Investment in plant and machinery fell 3.8 percent in the June 2009 quarter, the fourth consecutive quarterly fall. Imports of plant and machinery capital goods were down 4.0 percent, and domestic production of machinery and plant also decreased.
Overall, total inventories were run down $1.1 billion in the June 2009 quarter, with an $817 million run down in manufacturing inventories the largest contributor. The large run down in inventories was driven by exports of goods, as demand was met through existing stock rather than production. Lower manufacturing and imports of goods this quarter also meant that those inventories weren't replaced.
Government
General government final consumption expenditure decreased 1.0 percent in the June 2009 quarter, and was up 2.3 percent for the year ended June 2009. Central government recorded a 1.4 percent decrease in expenditure in the latest quarter, with decreases in education spending the main contributor. This is the largest decrease in central government expenditure since the December 2001 quarter. Local government final consumption expenditure increased 2.2 percent in the June 2009 quarter.
Exports and imports
Export volumes of goods and services increased 4.7 percent in the June 2009 quarter, following a 0.6 percent increase in the previous quarter. Export volumes for the year ended June 2009 were down 3.9 percent.
The volume of goods exported increased 5.0 percent in the June 2009 quarter. Increases in export volumes of dairy products (up 20.9 percent) and wood and paper products (up 6.9 percent) were the largest contributors to the increase. The increase in wood and paper products was related to the increase in domestic production of forestry and logging.
Exports of services were down 2.6 percent in the June 2009 quarter. Exports of travel services, which measures the volume of spending by overseas visitors to New Zealand, decreased 1.6 percent.
Import volumes of goods and services were down 3.8 percent in the June 2009 quarter. Intermediate goods had the largest contribution (down 6.1 percent). Passenger motor cars recorded an increase this quarter (up 36.3 percent), following large declines in the last two quarters. For the year ended June 2009, import volumes decreased 12.3 percent compared with a 10.1 percent increase in the year ended June 2008.
In the June 2009 quarter, merchandise import volumes decreased 3.7 percent, while imports of services decreased 3.9 percent.
The largest decreases in merchandise import volumes in the June 2009 quarter came from imports of intermediate goods. Imports of capital goods also fell (down 3.5 percent), with imports of machinery and plant equipment (down 4.0 percent) the main driver. This movement is also reflected in the decline in investment in plant machinery and equipment (down 3.8 percent).
Real gross national disposable income
Real gross national disposable income (RGNDI) decreased 1.3 percent for the year ended June 2009, while GDP contracted 1.8 percent over the same period. GDP is a measure of economic activity, while RGNDI is a measure of the volumes of goods and services that New Zealand residents have command over. RGNDI takes into account changes in the terms of trade effect (the price of imports relative to the price of exports), and real gains from net investment and transfer income with the rest of the world.
Implicit price deflators
The GDP implicit price deflator (IPD) for the year ended June 2009 increased 1.9 percent. The GDP IPD is a broad measure of the overall price change for final goods and services produced in New Zealand.
The IPD for gross national expenditure was up 3.9 percent for the year ended June 2009. This provides a broad measure of the overall price change for final goods and services purchased in New Zealand (such as consumer and investment goods). In the June 2009 quarter, the IPD for exports of goods and services fell 10.7 percent, mainly driven by a decrease in prices of dairy exports as reported in the Overseas Trade Indexes (Prices): June 2009 quarter (provisional) release.
Revisions
Production measure
- Forestry and logging have been revised as provisional data has been replaced with actual data. From the June 2009 quarter onwards, forestry and logging data will be actual rather than provisional.
- Agriculture value added has been revised due to implementation of new livestock benchmarks, updated deflators and revisions to source data.
- Manufacturing has been revised due to updated information from the quarterly Economic Survey of Manufacturing and revisions to the Producers Price Index (PPI).
- Wholesale trade has been revised due to updated information from the Wholesale Trade Survey.
- Mining, GST, education, ownership of occupied dwellings, import duties, finance and insurance, property services, and local government administration have all been updated due to updated source data.
Expenditure measure
- Household consumption expenditure has been revised due to incorporation of new annual benchmarks and updated source data.
- Inventories has been revised due to revisions to the Economic Survey of Manufacturing, the Wholesale Trade Survey and the PPI.
- Exports and imports have been revised due to updated source data from the Overseas Trade Indexes and Balance of Payments.
- Gross fixed capital formation and local government final consumption expenditure have been revised due to updated source data.
For technical information contact:
Anqi Tan or Viki Ward
Wellington 04 931 4600
Email: info@stats.govt.nz
Next release ...
Gross Domestic Product: September 2009 quarter will be released on 23 December 2009.