Photo: 123rf.com
- Economy shrinks 0.2% in June quarter
- Growth contracts 0.5% for the year ended June
- December quarter 2023 revised from a fall to flat, meaning NZ not in recession
- Households spend on food but not takeaways, cars, mobile phones
- Agriculture, construction, retail weaker; manufacturing, IT and health services grow
The economy went backwards mid-year as a slide in retailing, construction, agriculture, and service industries stymied growth.
Stats NZ data shows gross domestic product the broad measure of economic growth fell 0.2 percent for the three months ended June, with annual growth of -0.5 percent.
Revisions to the December 2023 quarter changed a small contraction to flat, meaning the economy had not fallen into recession as previously thought.
The numbers were better than economists had expected and followed a marginal rise in the first quarter.
"Activity in retail trade and wholesale trade has been in steady decline since 2022," Stats NZ national accounts industry and production senior manager Ruvani Ratnayake said.
The main contributors to the contraction were a fall in forestry and logging hitting agricultural output, a 0.4 percent drop in construction, and 1.3 percent declines in retail and wholesale business.
The growth spots were limited to information and technology, manufacturing on the back of a rise in transport equipment, and healthcare services.
Household spending increased 0.4 percent as consumers bought more food, although they spent less on big ticket items such as cars and mobile phones. Government spending was higher.
Individual shares of the economy shrank again, by 0.5 percent during the quarter, the seventh consecutive quarterly fall. Annually the per capita decline was 2.7 percent.
Real gross national disposable income, a measure of the country's purchasing power, was unchanged for the quarter, but was 1.1 percent lower than a year ago.
Economists have said the quickening decline in activity in May and June in particular was behind the Reserve Bank's move to cut interest rates last month, with more cuts to be expected this year and next.
Recent consensus forecasts from the Institute of Economic Research point to virtually little or no growth growth in the coming year.
New Zealand's economic activity was the weakest of all its major trading partners.