GDP grew 1.1% in the three months to March 2012, taking annual growth to 2.4%. The figure was a positive surprise, incorporating conservative growth in primary and manufacturing industries and nearly flat domestic spending. Looking at the detail however, the quarterly figure was helped by a large increase in the statistical discrepancy. Without this contribution growthbin the March quarter would have been a more modest 0.6%.
The latest GDP figures show that there were modest gains across a number of industries. Compared to December 2011, production in the primary and manufacturing industries expanded. Output in the agriculture, forestry and fisheries were up 2.1%, mining up 3.2% while the manufacturing industries grew 1.8%. Wholesale trade also grew 1.2% in the three months to March 2012.
While there were small but positive gains in other industries, there were also losses in a number of industries. Output in the construction, retail trade, service and utility sectors contracted in the latest quarter.
On the expenditure side, household and government spending were flat in the three months to March, with annual household spending growth at 2.0%. Growth in the business investment was a promising 4.2% up on year ago. Worryingly, exports declined considerably, down 1.7% from December 2011 quarter.
Domestic spending remains weak, further constraining growth in the retail and service sector. And the deteriorating trade performance over the past few months suggest it will be a while before we see New Zealand on a significantly stronger growth path.