Retail and tourism drive strong growth in quarter

This is the largest growth we’ve seen in retail and accommodation since the 2011 Rugby World Cup.

The economy grew 0.8 per cent in the December quarter, in line with most forecasts, led by shop sales and accommodation, as tourist spending boomed.

The lift took annual growth to 3.3 per cent, the highest increase since 2007 before the global financial crisis, Statistics NZ said.

The result for the quarter was exactly as predicted by the Reserve Bank and some other forecasters.

Most forecasts expected the economy to keep growing this year and next, though slightly more slowly than in the past year.

The economy grew a revised 0.9 per cent in the September quarter, down from 1 per cent reported earlier.

Westpac economists said the latest December quarter figures showed the economy continued a ‘‘robust’’ path at the end of last year, with strong growth in retail and services, offset by weaker farming and mining related sectors.

Meanwhile, in the GDP figures, retail and accommodation increased 2.3 per cent in the December 2014 quarter, buoyed by a 15 per cent increase in international tourist spending, as reported on Wednesday.

New Zealand household spending also increased 0.6 per cent.

‘‘This is the largest growth we’ve seen in retail and accommodation since the 2011 Rugby World Cup,’’ Statistics NZ national accounts manager Gary Dunnet said.

‘‘While some of this growth comes from more spending by New Zealanders, overseas visitors had a bigger impact.’’

In the past year, overall retail trade and accommodation sales have risen 5 per cent. Retail trade alone was up 1.8 per cent in the December quarter and has been rising for 16 quarters in a row.

Total visitor spending last year hit $7.4 billion, up 13 per cent on the previous year.

Rental, hiring, and real estate services also grew 1.2 per cent in the December 2014 quarter.

More house sales drove real estate services up more than 20 per cent, after falls in recent quarters.

Increased banking activity was reflected in a 1.1 per cent rise in financial services, while housing investment rose 5.2 per cent.

Manufacturing activity was also up this quarter, with an increase of 1 per cent.

The main driver was petroleum manufacturing, while imports of intermediate goods, which include fuels, also increased.