New Zealand: Strength in latest GDP numbers – Westpac

Michael Gordon, the senior economist at Westpac, notes that the New Zealand economy grew by 0.7% in the September quarter and while this was ahead of market forecasts, the annual revisions to the GDP data have made it trickier to interpret the recent results.

• "New Zealand's GDP rose by 0.7% in the September quarter, beating market forecasts of a 0.5% rise. However, that followed a heavily downwardly revised June quarter result (down from 0.5% to 0.1%). Indeed, the annual round of revisions to the GDP figures have altered the recent path of growth significantly, making it somewhat harder to interpret.
• GDP has been revised up substantially over 2018 - growth for the calendar year has risen from 2.9% to 3.2%. This means that the pace of growth held steady over that year, rather than slowing as the previous figures indicated. In contrast, growth in the first half of this year is much weaker than previously reported (although that result will itself be tested in next year's revisions).
• The revisions to history - and the upside surprise for the September quarter - appear to be due more to changes in the composition of GDP, rather than significant changes in any particular industries. The revisions have also created a more volatile quarterly path for GDP, with growth swinging between 1% in the December 2018 quarter to 0.1% in the June 2019 quarter (the previously reported figures were 0.7% and 0.5% respectively)."