Statistics New Zealand has announced that New Zealand experienced its largest single quarter decline in GDP, with a 12.2 percent fall for the June 2020 quarter. This is the largest decline since March 1991 quarter when New Zealand saw a 2.4 percent decline.
The fall in the June 2020 quarter comes after a 1.4 percent decline in the previous quarter, March 2020. With New Zealand now experiencing two consecutive quarters of decline, we are now officially in recession.
The industries with the largest declines for the quarter were as expected the retail trade, accommodation, restaurants, construction, and transport industries. Overall the construction, retail trade and accommodation, and transport, postal and warehousing industries declined by around $1 billion in quarterly value add.
Only the financial and insurance services industry experienced an increase for the quarter, with a small 0.7 percent increase.
On an annual basis, GDP declined by two percent for the year to June 2020. Strong declines for the construction, transport, postal and warehousing, and retail trade and accommodation industries. On a more positive note, the agriculture industry, along with a number of service industries, including information media and telecommunications, public administration and safety, and rental, hiring and real estate service industries, had an annual increase in their value add, despite the overall declines in the last two quarters.
Given that New Zealand spent around 75 percent of the June quarter in alert level two, three and four lockdown, will the fact that we are likely to spend around 66 percent of the September quarter in alert level two and three lockdown see a third quarter of GDP declines? In all probability we might see a small positive or most likely zero growth for the quarter compared to the June quarter.