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Explaining the Economic Slowdown in 1997/98

Published: Fri 3 Sep 1999 10:51 AM
Annual Enterprise Survey - 1998
Results from Statistics New Zealand's Annual Enterprise Survey explain the affects of the slowdown in economic growth for the New Zealand economy that occurred between 1997 and 1998 on profit, employment, investment and business performance.
The survey, which contains the most comprehensive data on the performance of the New Zealand economy, provides a detailed analysis of the pattern of economic change signalled in earlier releases of statistics.
Net profit before tax and salaries and wages paid to working proprietors decreased between 1997 and 1998 in all but two of the 15 industry groups. The Asian crisis, drought, a fall in most commodity prices, and increased competition in some industries contributed to this fall. The two industries to record an increase in profit were finance and insurance; and accommodation, cafes and restaurants. The largest falls in profit were recorded in the following industries: wholesale trade; property and business services; electricity, gas and water supply; and manufacturing. Agriculture services, forestry and fishing recorded a net loss.
Total gross income across the 15 industry groups increased by 2.8 per cent. The largest increases were recorded in finance and insurance; and wholesale trade. The largest falls were recorded in the manufacturing; and agricultural services, forestry and fishing industries. The latter industry was mainly influenced by the fall in log export volumes and prices during the Asian crisis. Factors affecting the agriculture industry, such as the drought, also affected the agriculture services component of the industry.
Investment in plant, machinery, vehicles and equipment fell 2.9 per cent with 10 of the industry groups recording decreases. The largest decreases in investment were recorded in accommodation, cafes and restaurants; agriculture services, forestry and fishing; and manufacturing.
This survey collects financial data from a wide selection of New Zealand businesses and is used to provide annual benchmarks for estimating annual and quarterly measures of economic growth (GDP). Detailed tables of the Annual Enterprise Survey are available on the Statistics New Zealand website.

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