Domestic Demand Strong in March 2007 Quarter

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Domestic Demand Strong in March 2007 Quarter

Economic activity increased 1.0 percent in the March 2007 quarter, following an increase of 0.8 percent in the December 2006 quarter, Statistics New Zealand said today. In the year ended March 2007, the economy grew 1.7 percent, down from the 2.0 percent growth recorded in the March 2006 year.

Domestic spending increased 1.2 percent in the March 2007 quarter, driven by a 2.2 percent increase in household consumption expenditure (HCE), combined with a 5.2 percent increase in business investment.

The increase in HCE was on the back of record growth in retail trade sales. The strong domestic result was partly offset by the continuing negative trade balance, with imports volumes now exceeding exports volumes for the sixteenth consecutive quarter.

From an industry perspective, the majority of the growth continued to come from services industries, which increased 1.2 percent in the March 2007 quarter, led by a 3.4 percent growth in retail trade activity. Goodsproducing industries also increased this quarter, with manufacturing activity increasing 1.1 percent, following decreases in the three previous quarters. Construction activity increased 2.6 percent this quarter, due to strong growth in non-residential building activity.

The expenditure-based measure of GDP, released concurrently with the production-based measure, recorded a 0.6 percent increase in the March 2007 quarter.

Geoff Bascand
Government Statistician

ENDS

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