Retail drives economic growth

growth, business, graph, chartNew Zealand’s economy grew 0.8 per cent in the last three months of 2014, led by retail and accommodation, according to Statistics New Zealand.

Combined with increases in real estate services and manufacturing, this boosted growth for the December 2014 year to 3.3 per cent. This is the highest annual increase since 2007, before the global financial crisis.

Retail and accommodation increased 2.3 per cent in the December 2014 quarter, buoyed by a 15 per cent increase in international tourist spending. 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,” national accounts manager, Gary Dunnet, said.

“While some of this growth comes from more spending by New Zealanders, overseas visitors had a bigger impact. Spending by Chinese, US, and UK visitors all increased in 2014, though Australians spent less.”

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 percent, after falls in recent quarters. Increased banking activity was reflected in a 1.1 per cent rise in financial services this quarter, while housing investment rose 5.2 per cent.

Manufacturing activity was also up this quarter, with an increase of one per cent. The main driver was petroleum manufacturing, while imports of intermediate goods (which include fuels, lubricants, and industrial supplies) also increased.

Food, beverage, and tobacco manufacturing was up 1.5 per cent, and exports of meat products and dairy products also rose.

The size of the economy (in current prices) was $238 billion for the year ended December 2014.

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