September 15, 2016 1:00pm by David Farrar

GDP grows 3.6%

Gross domestic product increased 0.9 percent in the June 2016 quarter, following a revised increase of 0.9 percent in the March 2016 quarter, Statistics New Zealand said today.

“Growth this quarter is being driven by strong domestic and export demand,” national accounts senior manager Gary Dunnet said. “Household spending was up 1.9 percent, with Kiwis spending more on going away, eating out, and furnishing their houses.”

Strong international demand saw exports increase 4.0 percent, with exports of goods posting its biggest quarterly increase in nearly 20 years. This increase was driven by exports of dairy products, meat, and fruit.

“Eleven of the 16 industries were up this quarter, with construction once again providing a boost to production.”

Construction grew 5.0 percent, with all construction sub-industries showing increases. This growth also reflected higher construction-related investment, with investment in residential building strongly increasing.

Service industries continued to grow, with a 0.7 percent increase. The main drivers were rental, hiring, and real estate services; retail trade; and health care.

GDP per capita increased 0.5 percent this quarter, following a 0.3 percent increase in the March quarter.

Bill English has noted:

The third highest growth rate in the OECD shows the Government’s management of the economy is delivering more jobs and opportunities for New Zealanders, Finance Minister Bill English says.

Statistics New Zealand reported Gross Domestic Product grew by 0.9 per cent in the three months to 30 June 2016. This took annual growth to 3.6 per cent – putting New Zealand’s growth rate in the top three among developed economies.

“Despite the tough period the dairy industry has been through, we are in the unusual position of enjoying solid growth, rising employment and real wages at the same time as very low inflation.

New Zealand’s annual growth rate of 3.6 per cent is more than double the OECD rate of 1.6 per cent and compares with 3.3 per cent in Australia, 2.2 per cent in the United Kingdom, 1.2 per cent in the United States and 0.8 per cent in Japan.

And do you recall the Labour/Green/NZ First manufactured manufacturing crisis. Well the manufacturing sector is 2.8% bigger than a year ago.

Also pleasing is the growth is mainly in the private sector, not the government sector. Private consumption is up 4.0% compared to 1.7% for government consumption.

Also Labour has claimed real GDP per capita is not increasing. Well real GDP per capita has increased 6.3% in the last three years from $45,681 to $48,545.