GDP turns negative in September quarter
The economy contracted in the third quarter of this year, the latest Statistics New Zealand figures show.
Gross domestic product (GDP) fell by 0.3% from the June quarter to the September quarter, Stats NZ reports. Over the 12 months to September, GDP rose by 1.3%.
An official measure of economic activity, GDP provides a snapshot of the value added to the economy over a quarterly or annual basis.
The September quarter fall follows 0.5% growth recorded over the June 2023 quarter, and two quarters of negative growth (-0.6% and -0.2%) over the December 2022 and March 2023 quarters.
Stats NZ national accounts industry and production senior manager Ruvani Ratnayake (pictured above) said that September quarter decline was driven by goods producing industries, led by a fall in manufacturing.
“The fall in manufacturing was driven by petroleum, chemical, plastic, and rubber manufacturing; and food and beverage manufacturing,” she said.
“The transport, postal, and warehousing industry also fell, and this was primarily due to a decline in freight logistics, with fewer goods being exported in the quarter.”
Commenting on the official September GDP figures, ANZ economists Miles Workman and Andre Castaing said in a media release that the 0.3% GDP fall was weaker than ANZ and RBNZ forecasts.
Data revisions suggest that economic momentum in recent quarters had been softer than previously thought, ANZ economists said. Compared to the Reserve Bank’s November Monetary Policy Statement, there appears to be a bit less momentum out there, which all else equal “raises the bar considerably for a hike.”
However, the latest GDP figures are “not an obvious catalyst for a rate cut any time soon”, ANZ economists noting that sticky inflation “remains the big concern”. Evolution of capacity indicators through to the February Monetary Policy Statement “will be key”, they said.
Despite the quarterly GDP fall, Stats NZ said that eight out of 11 service industries grew over the quarter, with the strongest rises seen in health care and social assistance; and rental, hiring and real estate services.
Household spending was down 0.6% over the quarter, led by falls in durable goods, with all categories experiencing falls. Households spent less on motor vehicles, following changes to fees and rebates introduced on July 1.
Exports fell over the quarter, with lower volumes of goods, including food, fuel and agriculture, fishing and forestry products, partly offset by a rise in service exports such as travel services.
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