The level of economic activity was unchanged in the March 2001 quarter, with GDP recording zero per cent growth,
according to information released today by Statistics New Zealand. This follows a 0.4 per cent increase in the December
2000 quarter and a 0.9 per cent increase in the September 2000 quarter. For the year ended March 2001, the economy grew
2.5 per cent, down on the 4.6 per cent growth recorded in the year ended March 2000.
Internal demand was marginally down this quarter, falling by 0.1 per cent. A decline in business and housing investment
more than offset increases in both household and government spending. While most of the decline in business investment
was in plant, machinery and equipment (down 22.3 per cent), both residential and non-residential building investment
also declined. Residential building investment is now 33 per cent lower than in the March 2000 quarter. This fall in
investment in fixed assets was partly offset by an increase in inventories (up $570 million). The increases in household
expenditure this quarter occurred in most categories, with the largest being used car purchases. A notable exception was
overseas spending by New Zealand households, which was down 2.8 per cent for the quarter.
Export volumes were largely propped up by services exports, reflecting the continued high number of overseas tourists
visiting New Zealand. Merchandise exports were down 0.4 per cent for the quarter, although up 5.0 per cent for the year.
By contrast, imports fell 0.7 per cent for the quarter, but were flat for the year. The fall for this quarter was due to
falls in imports of both goods and services. Consistent with the fall-off in investment, there was a notable fall in
imports of plant and equipment.
The flat activity in the economy this quarter reflects a balance between growth in the service industries and
contraction in the primary and goods producing industries. All service industries except transport recorded growth this
quarter. In contrast, activity in primary industries fell 1.1 per cent and goods producing industries fell 2.6 per cent.
There were decreases in activity in fishing, forestry, and mining and quarrying. The downturn in both fishing and
forestry was reflected in falling export volumes, while mining and quarrying activity decreased as a result of a fall in
oil and gas extraction. Countering these falls slightly was an increase in agricultural production of 0.5 per cent.
Annually, value added in the primary group of industries is 2.9 per cent higher than it was for the year ended March
2000, largely a result of an annual increase of 4.5 per cent in agriculture.
In line with falling meat exports, primary food manufacturing fell 2.6 per cent. The other manufacturing industries
experienced mixed fortunes this quarter, with five industries recording falls in activity, and four recording increases.
Overall, manufacturing, excluding primary food manufacturing, fell by 1.6 per cent. Building and construction activity
fell 6.8 per cent this quarter, following a 4.4 per cent drop in the December 2000 quarter, reflecting a drop-off in
business investment and housing construction. Activity in this industry has fallen to a level last
experienced in the September 1994 quarter.
The expenditure-based measure of gross domestic product (GDE), released concurrently with the production-based measure,
recorded a 0.2 per cent increase for the March 2001 quarter.
The GDP implicit price deflator recorded a 3.6 per cent increase over the year ended March 2001, reflecting the
significant depreciation of the New Zealand dollar over this period. This is the largest annual increase recorded since
the year ended September 1990. The GDP implicit price deflator is a broad measure of the overall price change for final
goods and services produced in New Zealand.
Brian Pink GOVERNMENT STATISTICIAN END