New Zealand's gross domestic product (GDP) rose by 2.8 percent in the June 2021 quarter, following a 1.4 percent increase in the March 2021 quarter, the country's statistics department Stats NZ said on Thursday.
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June 2021 quarter GDP was 4.3 percent higher when compared with the December 2019 quarter, the quarter immediately before New Zealand's first COVID-19 cases and the introduction of associated restrictions.
The 2.8 percent rise in June 2021 quarter GDP was led by the services industries. The primary and goods-producing industries also contributed to growth in the quarter.
Retail trade and accommodation was the largest contributor to GDP growth in the June 2021 quarter, driven by higher activity in accommodation and food services.
The transport, postal, and warehousing industry was boosted by rises in air transport and transport support services. This industry has been significantly affected by restrictions on international travel in response to the COVID-19 pandemic, as well as continued disruptions to the international transport of goods.
Despite the increase in activity this quarter, transport, postal, and warehousing has fallen 7.0 percent since the pre-COVID-19 December 2019 quarter.
Business services also contributed to the growth in services and total GDP in the June 2021 quarter, rising by 4.8 percent due to higher activity in engineering, architectural and consulting services.
Exports of services also increased in the June 2021 quarter, rising by 63.0 percent. This was driven by rises in exports of travel services, transport services, other business services, and also film exports. However, exports of services remain significantly affected by international travel restrictions due to COVID-19 and are still 43.0 percent below the levels of the December 2019 quarter.
"The June 2021 quarter experienced fewer COVID-19 restrictions than previous quarters affected by COVID-19. Many industries experienced activity at or above pre-COVID-19 levels, while some remained below," national accounts senior manager Paul Pascoe said.
Most of New Zealand was in alert level 1 for the entire June 2021 quarter, apart from Wellington, which spent six days in alert level 2 at the end of June.
"Prior to the COVID-19 pandemic, the June quarter traditionally showed a large decrease in international travel related activity, following the peak summer season in the March quarter," Pascoe said.
"However, COVID-19 has interrupted that seasonal pattern markedly."
COVID-19 restrictions have caused significant changes to typical patterns of activity, with international travel and related expenditure currently at very low levels and not showing the normal large decline from the March quarter peaks. This has muted overall GDP growth in the March 2021 quarter, and contributed to growth in the June 2021 quarter, he said.
"Opening the trans-Tasman travel bubble with Australia in the June 2021 quarter also contributed to services industries with links to tourism, such as retail and accommodation, and transport," Pascoe said.
Household consumption expenditure fell 1.4 percent in the June 2021 quarter, due to a 1.9 percent decline in household spending on services. This was partly offset by increases in spending on durable goods (such as electronics and furniture), which were similarly reflected in growth in the retail trade subindustry (up 2.6 percent).
When compared with the pre-COVID-19 December 2019 quarter, household spending increased by 6.0 percent with spending on durable goods 19.7 percent higher. ■