Drought restrains New Zealand economic growth
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E-mail Xinhua, September 19, 2013
New Zealand's economy grew by 0.2 percent in the quarter to the end of June, after a severe summer drought took its toll on the country's pillar agriculture sector, the government statistics agency announced Thursday.
"The drought early this year influenced falls in agriculture and manufacturing this quarter, but this was balanced by strong growth in the service industries," Statistics New Zealand acting national accounts manager Steffi Schuster said in a statement.
The result followed a GDP rise of 0.4 percent in the March quarter, when dry weather also slowed growth.
The industries with the largest contributions to growth this quarter were business services, which grew by 2.6 percent, led by architectural and engineering services, and retail trade and accommodation, which was up 2.1 percent, led by furniture, department store, food and clothing retailing.
However, agriculture was down 6.4 percent, driven by a large fall in dairy farming, and had fallen 10.4 percent since it peaked in the December 2012 quarter, as low rainfall reduced production.
Food, beverage, and tobacco manufacturing was down 3.8 percent, mainly due to a decrease in meat and dairy product manufacturing. Total manufacturing was down 0.1 percent.
Economic activity for the year ended June was up 2.7 percent.
Finance Minister Bill English said the drag caused by the drought was expected, but the economy continued to grow at one of the higher annual growth rates in the Organization for Economic Co-operation and Development (OECD) group of developed countries.
The annual growth remained relatively strong at 2.5 percent, compared with growth over the same period of 2.6 percent in Australia, 1.6 percent in the U.S., 1.4 percent in Canada, 1.3 percent in Japan, 1.5 percent in the UK and minus 0.5 percent in the Euro area.
"It's pleasing that despite the worst drought in 70 years, New Zealand still achieved one of the higher annual growth rates in the OECD," English said in a statement.
The Council of Trade Unions (CTU) said the economic growth could not be described as a "recovery" as it had failed to bring enough new jobs and unemployment was forecast to remain at least 6 percent this year.
"While it is good to see economic growth remained positive despite the drought, we have yet to see the strong job growth that is needed to seriously knock a hole in unemployment and joblessness," CTU economist Bill Rosenberg said in a statement. Endi
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