GDP numbers provided by Stats NZ today demonstrated that the size of the economy fell by 0.3% in September 2023.
NZCTU Economist Craig Renney said “this data is much weaker than had been expected by commentators, and should give decision-makers food for thought. If growth is weakening, additional interest rate increases should be even further from consideration. The coalition Government should also be making sure that it has support for workers and communities ready should unemployment rise quickly as well.
“This data shows worrying signs that important parts of the economy have stalled. Manufacturing (-3.4%), mining (-1.8%), food production (-2.4%), construction (-1.7%), and transportation (-4.5%) all saw significant falls in output this quarter. Goods-producing industries saw their output fall 2.6%.” GDP per capita fell 0.9% in September, demonstrating that GDP figures may have been worse were it not for the impact of population growth.
“Now is not the time for tax cuts that will simply stoke house prices in the housing market and add little value to the real economy. Instead, government can act to counterbalance the impact of this downturn through investment in tackling our chronic infrastructure gap. That would not only have the benefit of making New Zealand a better place to live, it would also support future economic growth.
“GDP data shows weakness in both the consumer pockets, with household spending being down 0.6%. In particular, spending on durable goods (like household appliances) fell by 3.2%.
“This is indicative of households feeling worried about the future, particularly about their employment security. The government should be showing how it is going to support economic demand over the next few months, rather than taking it away through cuts and removing employment protections.”
