Drought show effects in low GDP gain

And Statistics New Zealand says the drought will impact on the economy for several quarters.
Agriculture was down 4.7% due to dry weather in the quarter, which meant that dairy stock were dried off early resulting in lower milk production, says Statistics New Zealand.

"The impact of the drought showed up as expected, with lower milk production and higher slaughter numbers for the first three months of 2013," GDP project manager Jason Attewell says. "We expect the drought will impact on the economy for several quarters, as lower herd numbers and conception rates will affect future production."

The result follows a rise of 1.5% in the December 2012 quarter, and for year overall from March 2013, it was up 2.5%.

On the upside for the March quarter Canterbury rebuild boosted activity for construction and related services, says Attewell says. "The rest of the economy was a mixed bag, but we are coming off very strong growth in the previous quarter."

The largest movements by industry this quarter were:
• Business services (up 3.9%), driven by architectural and engineering services in Canterbury and Auckland. Activity related to the census, which was held in March 2013, is also included in this industry.

• Construction (up 5.5%), due to residential building and associated construction services activity in Canterbury.
Partly offsetting these increases were the drought and information media and telecommunications (down 3.1%), due to declines in call minutes between December and March.

The expenditure measure of GDP was also up 0.3% in the March 2013 quarter. The main features of this growth were:
• Household expenditure, which measures the volume of goods and services consumed by households, rose 0.4%. This has not fallen since the March 2009 quarter, and has grown 10.1% over that time.

• Investment in fixed assets rose 0.3%, with a rise in residential building partly offset by a fall in plant and machinery investment.