Posted on 15th September 2014 by Tony Alexander
Statistics New Zealand released data this morning showing us that after growing by 1% in December and March quarters our economy grew by a still above average .07% during the June quarter.
This means that the official growth rate, calculated as four quarters versus the same four quarters a year earlier, rose to 3.6% from 3.2% last quarter and 2.2% a year earlier. This is the strongest annual rate of growth in the NZ economy since early 2005 so it is unsurprising that this nine-year high in growth has produced earlier revealed 3.7% growth in job numbers this past year and a fall in the unemployment rate from 7.2% to 5.6%. [now 5.3%]
Driving the 3.6% growth this past year was a near 12% rise in construction, 6% growth in agriculture, over 4% growth in retail trade and financial services, and over 5% growth in health and social care.
Over the past two and a half decades the average pace of growth in the NZ economy has been 2.5% therefore 3.6% growth is well above average. Construction usually grows just 3% to 12% growth is an absolute boom. Agriculture normally grows less than 2% to 6% is also a boom.
The 0.7 quarterly growth rate was almost right on market expectations of 0.6% growth, therefore, the outcome had a little meaningful measurable impact on the financial markets.