New Zealand household income fails to keep up with spending

New Zealand's total household spending continued to outstrip total household disposable income in the year to the end of March, driven by falling dairy prices, the government statistics agency said Thursday.

Household disposable income was up 2.8 percent to 138.4 billion NZ dollars (99.7 billion U.S. dollars), while spending was up 3.6 percent to 141.4 billion NZ dollars (101.86 billion U.S. dollars) in the March year, according to Statistics New Zealand.

Household expenditure increased across all categories.

Meanwhile, household saving fell reflecting a drop in income for farmers due to weak global dairy prices.

"Saving for the household sector continued to decline since a peak in 2012, after which household disposable income increased at a slower rate than household spending," national accounts senior manager Gary Dunnet said in a statement.

World milk prices continued to fall in the March year, resulting in continued weakness in the operating surplus for the pillar agriculture industry.

"This has a direct impact on the income distributed by farm businesses to households," said a commentary from the agency.

"Farm entrepreneurial income for 2016 fell to 1.8 billion NZ dollars (1.29 billion U.S. dollars), decreasing further from the 2.5 billion NZ dollars (1.8 billion U.S. dollars) recorded in 2015 and 7.7 billion NZ dollars (5.55 billion U.S. dollars) in 2014." Endit