New Zealand GDP comes in at expectations, domestic household spending flat

New Zealand GDP came in at expectations, with the q/q figure printing at 0.5% (previous 0.6%), and the y/y/ figures coming in at 2.7% (previous 2.9%).  

Domestic household spending was flat from the previous quarter, while household spending overseas climbed 2.9%, the highest quarterly growth since the December 2016 quarter.

Key quotes

“Primary industries were up 0.6 percent in the March 2018 quarter due to increased agricultural activity. This follows a 2.6 percent drop in the previous quarter.

Growth in the agricultural industry was driven by increased milk production, brought about by more favourable weather conditions in February and March. Increased milk production flowed through to an increase in manufacturing of dairy products. However, dairy exports were down 1.0 percent in the quarter. Beef and sheep farming fell in the March 2018 quarter, offsetting the growth from dairy production. At the same time, manufacturing of meat and meat products also fell, while exports of meat products were down 8.9 percent.

Forestry production experienced strong annual growth of 6.7 percent for the year ended March 2018. This growth came on the back of record harvest volumes, despite an 8.4 percent fall in the March 2018 quarter. The decrease in harvest volumes this quarter aligns with a 15 percent drop in forestry primary product exports.

Household spending was flat in the March 2018 quarter, following a 1.2 percent rise in the December 2017 quarter. Up until the March 2018 quarter, household spending had been growing every quarter since September 2012. Increased household spending on services was offset by decreased spending on goods. A fall in spending on new and used motor-vehicle purchases was likely the result of the reduced availability of cars after stink bugs were detected in car shipments. Little growth in the retail trade industries reflects the flat household spending across the quarter.”