| Economic growth |
| Background: |
| A country’s gross domestic product (GDP) is a measure of economic activity during a period, normally reported on a quarterly and an annual basis. It is the sum of the monetary values of all final goods and services produced in an economy. The primary indicator used for tracking economic growth over time is known as real gross domestic product or real GDP. Real GDP is gross domestic product adjusted for changes in prices. New Zealand’s official gross domestic product figures are sourced from Stats NZ. |
| Gross domestic product: |
| The economy has contracted in both last two quarters, meeting the technical definition of a recession. |
| Following a 0.3 percent contraction in the September 2023 quarter, gross domestic product contracted by a further 0.1 percent in the December 2023 quarter. Economic growth on a per capita basis has been negative for the last five quarters. |
| On an annual average basis, GDP expanded by 0.6 percent over the 2023 calendar year. The lowest annual average growth rate since the year ended in the March 2021 quarter (which was negative). |
| Over the 2023 calendar year, economic growth was driven by an expansion in the services and primary sectors. The goods-producing sector contracted over the year due to lower value-added output from the manufacturing and construction industries. |
| Employment and Unemployment: |
| Background |
| The unemployment rate measures the number of people unemployed as a proportion of those in the labour force. The labour force is the number of people of working age (15 years and over) who are working for wages or a salary, working for a family business, or who are unemployed and seeking work. In New Zealand, the official unemployment rate is sourced from Stats NZ’s quarterly Household Labour Force Survey (produced as part of its Labour Market Statistics). |
| Labour market |
| The unemployment rate was 4.3 percent in the March 2024 quarter, in seasonally adjusted terms. This is up 0.3 percentage points from the December 2023 quarter. The employment rate fell from 69 percent to 68.4 percent for the same period. In the March 2024 quarter, 2,939,000 people were employed. |
| The seasonally adjusted labour force participation rate also fell slightly to 71.5 percent in the March quarter, down from 71.9 percent in the previous quarter. The number of people who were not in the labour force increased to 1.2 million in the March 2024 quarter, up 22,000 over the quarter and 61,000 over the year. |
| Other data |
| The Seek Employment Report shows a four percent decrease in job advertisements in April and are 30 percent lower year-on-year. While advertisements in most industries declined in April, some recorded growth, including a 17 percent increase in the insurance and superannuation industry and a two percent increase in education and training. Applications per job advertisement rose five percent and are now 96 percent higher than the same time last year. Employment intentions in the ANZ Business Outlook Survey fell further, from -0.9 in April to -6.9 in May which is the lowest since January 2023 |
| Inflation |
| Background |
| Inflation is the change in prices of goods and services over a certain period. The official rate of consumer inflation is measured by Stats NZ’s Consumers Price Index (CPI). The CPI tracks the price of a basket of household goods and services over time on a quarterly basis. |
| Consumers Price Index |
| New Zealand’s annual inflation rate was four percent in the year ended in the March 2024 quarter, above the two percent midpoint of the Reserve Bank’s 1 to 3 percent medium term target band. |
| Annual inflation peaked at 7.3 percent in the year ended in the June 2022 quarter. |
| Consumer goods and services prices rose by 0.6 percent in the March 2024 quarter. The increase in prices in the quarter was driven by higher prices for cigarettes and tobacco, housing rental costs, costs associated with the purchase of new dwellings, and insurance premiums. Partially offsetting these price increases were lower costs for international air transport, vegetables, petrol, and the cost of new motor vehicles. |
| Other data |
| The average house price in New Zealand fell for the second consecutive month in May according to CoreLogic’s House Price Index. Average prices fell 0.2 percent to $931,438 during the month but remain one percent higher than a year ago. Average house prices in Auckland fell by 0.8 percent in May to $1,279,454. |
| Annual food price inflation rose slightly to 0.8 percent in the year ended April 2024. This compares to a peak of annual food price inflation of 12.5 percent for both April and June last year. In the latest year, fruit and vegetable prices fell by 13 percent, with prices a year earlier influenced by the impact of Cyclone Gabrielle on food production and prices. |
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| New Zealand |
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