Lacklustre growth confirmed

Concerns that the economy may not be firing on all cylinders appear to be on the money, with Statistics NZ reporting lacklustre GDP growth of 0.5 per cent in the first quarter of 2017.

ANZ and Westpac had forecast a much healthier growth rate of 0.8 per cent, though ASB had been on the mark with its forecast.

The figure followed disappointing growth of 0.4 per cent in the final quarter of last year and comes against the backdrop of strong population growth driven by record immigration – which should boost the numbers.

Economic Development Minister Steven Joyce said the GDP figure was slightly lower than expected and ‘‘a reminder to everyone not to take New Zealand’s economic performance for granted’’.

But he also said people should be careful of quarterly figures, which could go ‘‘up and down’’.

Labour finance spokesman Grant Robertson said the figures meant GDP per person had fallen over a six month period.

That showed the need for ‘‘a fresh approach to give all New Zealanders a fair share in prosperity’’, he said.

The next set of GDP figures is due to be released on September 21, just two days before the general election.

Explaining the second quarter of ‘‘moderate GDP growth’’, Statistics NZ national accounts manager Gary Dunnet said much lower building activity ‘‘combined with mixed results for the service sector’’ had taken the shine off higher dairy production.

Agriculture grew 4.3 per cent due to higher milk production. This flowed through to higher dairy product manufacturing, which contributed to the overall rise in food, beverage, and tobacco product manufacturing.

Construction fell 2.1 per cent, with all building sectors showing a fall. Nonresidential building construction declining from a recent peak, was the key driver, Statistics NZ said Activity in the service industries was mixed, up 0.4 per cent.

- Tom Pullar-strecker