Construction, household spending drive New Zealand GDP growth

New Zealand's gross domestic product (GDP) grew by 1.1 percent in the quarter ending September despite a slowdown in exports, the government statistics agency said Thursday.

The September growth followed an increase of 0.7 percent in the June quarter, according to Statistics New Zealand.

"This quarter's rise points to broad-based growth," national accounts senior manager Gary Dunnet said in a statement.

"Thirteen of the 16 industries were up, with the main weakness coming from agriculture."

Household spending continued its strong growth, increasing 1.6 percent in the September quarter, following a 2-percent increase in the June quarter.

"We've seen Kiwis spend more on domestic travel, accommodation, eating out, and recreation," Dunnet said.

While export growth fell over the September quarter, export volumes remain high, and imports rose, reflecting large purchases of aircraft.

Service industries continued to grow, increasing 1.1 percent in the quarter, driven by business services, transport, postal and warehousing services, and arts, recreation, and other services.

Manufacturing activity rose on the back of food, beverage, and tobacco manufacturing; and transport equipment, machinery and equipment manufacturing.

Construction grew 2.1 percent, reflecting higher construction-related investment, with continued investment in residential building.

GDP per capita increased 0.6 percent in the September quarter, following a 0.2-percent increase in the June quarter.

Annual GDP growth for the year ended September rose to 3 percent and the size of the economy in current prices was 256 billion NZ dollars (176.77 billion U.S. dollars).

Finance Minister Steven Joyce said New Zealand's economic growth in the year to September was the fifth strongest in the Organization for Economic Co-operation and Development, ahead of Australia (1.8 percent), the U.S. (1.6 percent), Canada (1.3 percent) and the Euro area (1.7 percent).

"It's hard to overstate the importance of key service sector exports like tourism and education in New Zealand's economic success in recent years. They have taken up a lot of the shortfall as the dairy sector went through its downturn. Other food sectors and hi-tech exports have also contributed significantly," Joyce said in a statement.

"The world remains an uncertain place and it is important that the government, businesses and households collectively keep our feet on the ground and not go crazy with the credit card." Endit