Growth tipped to slow

Economists expect New Zealand’s GDP growth, announced on Thursday, will come in at 0.5 per cent for the September quarter.

That would see annual economic growth slow from 2.8 per cent to 2.7 per cent.

In some respects there was an element of payback to the lower third-quarter figure after GDP for the second quarter came in surprisingly strong at one per cent, ANZ economists said in their preview.

In the second quarter “a number of temporary factors provided a boost, including a weather-related recovery in milksolids production, livestock slaughtering boosted by M. bovis, and aboveaverage hydro lake levels”, they said.

Economists at ASB and Westpac were also picking 0.5 per cent for the quarter.

“The degree of uncertainty around our GDP forecast is higher than usual, for two reasons,” Westpac’s Michael Gordon said.

“The first is it’s unclear how much of a rebound we’ll see in the mining sector, after a sharp drop in activity in the June quarter.

“The second reason is that this quarter will include the regular annual revisions to the GDP data, which can alter our understanding of how the economy has performed in recent times.”

ASB economists said they expected the lower growth to linger into the December quarter.