June 21, 2012 12:16pm by David Farrar

Strong growth

Economic activity, as measured by gross domestic product (GDP), grew 1.1 percent in the first three months of 2012, Statistics New Zealand said today. This strong growth follows revised growth of 0.4 percent in each of the previous three quarters.

Compared with the March 2011 quarter, economic activity in the March 2012 quarter was up 2.4 percent. For the year ended March 2012, economic activity was up 1.7 percent compared with the year ended March 2011.

“This quarter we saw growth spread across a number of industries, while in previous quarters the industry picture had been more mixed with growth in some industries offset by falls in others,” national accounts manager Rachael Milicich said.

The main contributors to the increase in economic growth this quarter were, by industry:

manufacturing (up 1.8 percent), due to increases in primary food manufacturing and metal product manufacturing

business services (up 2.0 percent), which include professional, scientific, technical, administrative, and support services

agriculture (up 2.3 percent), mainly driven by an increase in milk production.

The market was expecting growth of 0.5% to 0.6% so this is an excellent result. The annual figure is very respectable also. The Government will be pleased. The challenge is to keep growing, and to have it sustainable.

People may wish to ponder how a significant factor in the growth was an increase in milk production, and the official Green party policy is to kill (or make magically disappear) every fifth cow, which presumably would decrease milk production by 20%.