NZ economy picks up

By Phil Boeyen, ShareChat Business News Editor

Friday 28th September 2001

New Zealand's economy has grown strongly in the June quarter although the yearly increase is below previous levels.

New figures show gross domestic product rose 2% for the three months ended June, much higher than the 0.3% March quarter rise or the December increase of 0.4%.

For the year ended June GDP increased by 2.3% compared to growth of 5.2% in the previous year.

Statistics New Zealand says following two quarterly declines, internal demand rose in the June quarter, largely due to an increase in business investment.

"This recovery, along with a rise in exports, resulted in the strong growth in GDP this quarter. Business investment increased across most asset types with, most notably, spending on plant machinery and equipment jumping 28.4% following a fall last quarter.

"This increased demand was partly met by a run down in inventories. Investment in non-residential and other construction also recorded increases following falls last quarter."

Household spending rose 0.7% in the June quarter with spending on durables up strongly by 4.2%, mostly attributable to used car purchases.

Partly offsetting this was a fall in expenditure by New Zealanders travelling overseas, which was down by 8%.

"With both internal demand and exports up, industrial activity picked up across the board with only a few industries recording decreases. The most significant growth this quarter occurred in the goods producing industries, with manufacturing and construction both recovering strongly from declines in the previous quarter," SNZ reports.

Figures show that construction activity was up 7.3% this quarter but is still down 10.5% for the year.

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