Friday, December 20, 2013

Ho hum; more good news

There's been so much economic good news of late that a day WITHOUT good news would almost be newsworthy. But the GDP growth figures released by Statistics NZ yesterday are further proof that the economy is in an aggressive growth phase; the Herald reports:

Economic activity grew 1.4 per cent in the September quarter to be 3.5 per cent larger than a year earlier, the strongest results for four and six years respectively.
But New Zealand is a grass-fed economy and that imparts volatility to its quarterly data. Agricultural activity surged 17 per cent in the September quarter, led by dairying but reinforced by sheep and beef.
When forestry (up 8.2 per cent) and fishing are added, primary production was up 13.9 per cent in the quarter and contributed the lion's share, 0.9 percentage points, of the quarter's overall 1.4 per cent growth.
But that followed two quarters in which it shrank as a result of last summer's drought.
For the year ended September, as a whole agriculture, forestry and fishing contracted by 3.7 per cent compared with the year before.
By contrast over the past year manufacturing grew 1.8 per cent on the year before, to the highest level in five years and 19.4 per cent above its trough in June 2009.
And construction activity, which fell 1 per cent in the September quarter reflecting a drop in heavy and civil engineering work and despite an 8.5 per cent increase in residential building, was up 13.8 per cent in the year ended September compared with the September 2012 year.
Overall, annual average economic growth was 2.6 per cent.
ANZ economist Mark Smith said Mother Nature had provided some quarterly volatility but ignoring that noise it was clear the economy had a good head of steam up.

There were all sorts of dire predictions about the summer drought killing off New Zealand's economic recovery. But those predictions have proved to be way off the mark; the agricultural sector is leading the recovery.

Here's a graph from Stats NZ showing quarterly growth since 2007:

The New Zealand economy was already headed into recession when National took office in November 2008. New Zealand led the world into the Global Financial Crisis, but now we are leading the world out of it, and into a period of economic prosperity. Quarterly GDP growth has now been in positive territory for eleven consecutive quarters, and this week's forecast from Treasury was of a period of sustained growth going forward.

Already Labour and the Greens seem to accept that they cannot fight next year's election on the economy, and they are more likely to focus on issues such as child poverty. Time will tell how that pans out.

In the meantime, the economy is growing, unemployment is falling and is tipped to fall further, and the world still has an appetite for New Zealand's produce. It is a great way to end the year.


Quintin Hogg said...

It has taken hard work to get to this stage.

It will take hard work to maintain and preserve the progress this government has made.

On other things I see Greenpeace failed in their JR against Andarko yesterday.

Costs follow the event baby!

Keeping Stock said...

Quite so QH; you can probably expect a post on that today, and you're dead right about the small matter of costs!

mark said...

Surely Greenpeace can play the Andarko shell game too.