NZ in recession: GDP down again -1%, declines in manufacturing, construction

Thursday, 19 December 2024

Economic activity declined again in the three months to September, with manufacturing and construction reporting negative growth compared to the previous quarter.

It was the second time in a row that Gross Domestic Product (GDP) - a measure of economic activity - had fallen, with Stats NZ reporting a decline of -1% in the September quarter, following a -1.1% decline in the June quarter (revised down from -0.2%).

The biggest declines in economic activity were in manufacturing, business services, and construction, down -2.6%, -1.5%, and -2.8%, respectively.

The fall in manufacturing came after several mills and manufacturing facilities shut down, and amid a rise in unemployment.

The electricity, gas, water and waste services sector recorded a decline of -3.7%, compared to -1.6% in the previous quarter. Arts and recreation was also down -2.9%.

Industries that bucked the trend included agriculture, up 1.4%, driven by horticulture and fruit growing, as well as dairy farming.

“We also saw a rise in exports of milk powder, butter and cheese,” Jason Attewell, Stats NZ's macroeconomic growth spokesperson, said.

Rental, hiring and real estate services were up 1%.

GDP per capita - or per person - fell by -1.2% during the three months to September, the eighth consecutive decline.

Retail trade continued its decline, down-1.1%. Household consumption was down 0.3%, driven by a fall in the purchasing of household essentials, such as groceries and electricity.

The size of the New Zealand economy was $420 billion in the year to September, up from $415b for the year ended June.

GDP September Quarter

• New Zealand: -1%

• Australia: 0.3%

• Canada: 0.3%

• China: 0.9%

• Japan: 0.3%

• Britain: 0.1%

• United States: 0.7%