New Zealand’s economy may have extended its steady rate of growth for a fifth straight quarter with buoyant retailing lifting the services sector and construction, making up for a weaker primary sector.
Gross domestic product grew 0.9% in the third quarter, based on a Reuters survey and the Reserve Bank’s November forecast. That’s also the average of the past five quarters of growth. Annual growth is expected to accelerate to 3.7% from 3.6%, NBR reported.
The reserve bank expects quarterly growth to accelerate to 1% in the last quarter of 2016, when it has forecast inflation will return to its target band. Economists don’t expect the GDP figures or the balance of payments being released at the same time on Dec. 22 to alter the bank’s assessment of monetary conditions, with last month’s quarter-point cut to the official cash rate seen as the last, while there have been calls for the first hike in late 2017.
“Indicators over the past few months have painted a positive picture for economic growth,” said Sarah Drought, economist at Westpac Banking Corp, in a note. “While the largest contributions are expected to come from manufacturing, retail and professional services, growth looks relatively broad-based across the economy, with agriculture a notable exception.”
The country’s construction industry can’t keep pace with demand, while migration inflows are at record levels, as are tourist numbers. Dairy farmers, in the doldrums after an extended bout of weak prices, now have more economic returns. Sectors such as horticulture are reporting strong demand.
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