NZ Q1 GDP: Decent beat on expectations

NZ 2016 Q1 GDP came in higher--than-expected at +0.7% q/q vs +0.5% estimates and +0.9% last, while  Q1 GDP  y/y  stood at +2.8% vs 2.6% expected and 2.3% prior.

Key Facts

- The latest growth was driven by the construction and health industries, but partly offset by decreases in the primary industries and manufacturing

- Construction rose 4.9%, the strongest quarterly growth for the industry since March 2014

- Service industries +0.8 percent this quarter, health and retail trade industries led the overall increase

- When the rising population is taken into account, our GDP per capita rose 0.1 percent on the previous quarter

- Strong tourist arrivals also supported the growth in service industries, reflecting a 4.9 percent rise in tourist spending

The main movements by industry were:

• construction was up 4.9 percent, due to growth in construction trade services, and heavy and civil construction – all construction sub-industries increased
• health care and residential care was up 2.7 percent – both private and public health care were up
• manufacturing was down 0.4 percent, due to decreased food, beverage, and tobacco manufacturing. 

Expenditure on gross domestic product grew 0.5 percent in the March 2016 quarter.

The main movements in GDE were:

• investment in fixed assets was up 2.4 percent, due to increased investment in residential building and other construction (including roading and telecommunication investment)
• household consumption expenditure was up 0.4 percent – spending on services, durable goods, and non-durable goods all increased
• inventories built up $183 million, due to an increase in manufacturing inventories
• exports of goods and services was down 1.0 percent, and imports of goods and services was up 0.2 percent.