Gross domestic product: December 2020 quarter
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Gross domestic product: December 2020 quarter
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Gross domestic product: December 2020 quarter – overview diagram
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Gross domestic product: December 2020 quarter – supplementary tables
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Gross domestic product: December 2020 quarter – visualisation CSV
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Key facts
In the December 2020 quarter compared with the September 2020 quarter:
- GDP declined by 1.0 percent.
- Goods-producing industries fell by 3.2 percent.
- Primary industries fell by 0.6 percent.
- Service industries rose by 0.1 percent.
- GDP per capita fell by 1.2 percent.
- Real gross disposable national income per capita fell by 1.1 percent.
Over the year to December 2020:
- Annual GDP growth declined 2.9 percent.
Quarterly GDP falls after record September quarter rise
Economic activity, as measured by gross domestic product (GDP), was down 1.0 percent in the December 2020 quarter. This follows a revised rise of 13.9 percent in the September 2020 quarter. On an annual basis, GDP declined by 2.9 percent over the year to December 2020.
Service industries, which make up about two-thirds of the economy, grew slightly, rising 0.1 percent. Goods-producing industries, which make up about one-fifth of the economy, fell by 3.2 percent. Primary industries, which makes up the remainder of the economy, fell 0.6 percent.
COVID still impacting GDP
All regions of New Zealand were at COVID-19 alert level 1 during the December 2020 quarter, except for the Auckland region, which spent the first 7 days of the quarter at alert level 2. The borders remained closed to international tourists for the entirety of the quarter.
Despite the relatively low levels of restriction on movement and business activity in the December 2020 quarter compared to the March, June and September 2020 quarters, COVID-19 restrictions are still having an impact on economic activity. The December 2020 quarter results reflect an easing of activity following a post-lockdown catch up in the previous quarter, and the continued absence of international visitors.
Goods-producing industries lead the decline in GDP
Goods-producing industries declined by 3.2 percent in the December 2020 quarter following a strong rise in the September quarter. The decline in goods-producing industries was led by construction, which fell by 8.7 percent, followed by a 0.7 percent fall in manufacturing. Electricity, gas, water, and waste services was the only goods-producing industry to rise in the quarter, up 1.9 percent. On an annual basis, goods-producing industries fell 4.4 percent.
The construction industry was the primary contributor to the decline in GDP, after record quarterly growth in the September 2020 quarter. On a sub-industry level, the fall was driven by construction services, heavy and civil construction and non-residential construction, while residential construction rose over the quarter. On an annual basis, construction was down 7.3 percent in the year ended December 2020.
Slight rise in service industries offset by decline in primary industries
Service industries rose 0.1 percent in the December 2020 quarter, countering a 0.6 percent decline in primary industries. On an annual basis, service industries were down 2.2 percent in the year ended December 2020, while primary industries were down 4.0 percent.
Within the service industries, retail, accommodation, and restaurants led the quarterly fall, declining 5.0 percent. This was driven by roughly equal declines in retail trade, and accommodation, restaurants, and bars. On an annual basis, retail was up by 2.5 percent, while accommodation, restaurants, and bars were down 13.0 percent. The fall in the latter is largely due to COVID-related travel restrictions on international visitors.
This fall was counterbalanced by rises in both transport, postal, and warehousing, and business services, up 7.0 and 2.0 percent respectively. Although transport, postal, and warehousing posted the largest growth of any industry in the December 2020 quarter, on an annual basis it had the largest fall, down 25.6 percent. This is largely due to the lack of international travel.
Within the primary industries, agriculture fell by 2.0 percent, while fishing and forestry rose by 3.1 and 1.7 percent respectively. Mining also rose slightly in the quarter, up 1.5 percent.
Expenditure on GDP declines
Expenditure on GDP fell by 1.5 percent in the December 2020 quarter. On an annual basis, expenditure on GDP fell by 1.1 percent in the year ended December 2020.
Strong rise in imports, fall in exports
Imports rose by 9.1 percent in the December 2020 quarter, driven by a 9.0 percent rise in the import of goods, primarily in passenger motor cars. On an annual basis, imports were down 16.5 percent. Imports of services rose 9.4 percent in the quarter but were down 29.8 percent on an annual basis.
Exports fell 1.1 percent in the December 2020 quarter, driven by a 17.3 percent decline in export of services. This reflects the impact of COVID-19 border restrictions on international visitor spending at a time of year when it normally increases. Export of goods rose 3.5 percent, driven by roughly equal rises in dairy products and other food, beverages, and tobacco. On an annual basis, exports were down 12.0 percent.
Household spending continues to rise
Household spending rose 1.1 percent in the December 2020 quarter, driven by a 3.8 percent rise in household spending on services. Household spending on durable and non-durable goods were both down 1.5 and 1.0 percent, respectively, after strong rebounds in the September 2020 quarter.
On an annual basis, household spending was down 1.7 percent over the year ended December 2020, driven by a fall in household spending on services.
Gross fixed capital formation declines
Gross fixed capital formation fell 1.4 percent in the December 2020 quarter, driven by declines in other construction and plant, machinery, and equipment, down 7.5 percent and 3.3 percent respectively. Non-residential building also declined 4.5 percent in the quarter. These declines were partially offset by a 1.9 percent rise in residential building, and a 2.0 percent rise in investment in intangibles.
GDP per capita falls
GDP per capita fell by 1.2 percent in the December 2020 quarter, and declined by 4.9 percent in the year ended December 2020.
The quarterly declines were driven by the fall in GDP in the December 2020 quarter, as well as population growth which was up 0.2 percent in the December 2020 quarter and 2.1 percent over the December 2020 year.
New Zealand’s real purchasing power falls
New Zealand’s ability to buy goods and services from its income decreased in the December 2020 quarter. Real gross national disposable income (RGNDI), which measures the real purchasing power of the country’s disposable income, fell 0.9 percent in the quarter.
The decline in RGNDI was driven by the fall in economic activity, countered slightly by a rise in the terms of trade, improvements in net investment income on our international investments, and net transfer flows.
New Zealand’s terms of trade rose 1.3 percent as both export and import prices fell over the quarter, with import prices falling more than export prices. The terms of trade is the ratio of the price of exports to the price of imports. An increase in the terms of trade results in less exports being needed to pay for a given volume of imports. This means that residents can purchase more goods and services by volume from the income generated from a given level of domestic production.
The 1.0 percent fall in GDP, coupled with a population increase of 0.2 percent over the quarter, pushed RGNDI per capita down 1.1 percent in the quarter.
Annually, RGNDI fell 1.7 percent over the year to December 2020 while RGNDI per capita fell 3.7 percent over the year.
While GDP measures economic activity, RGNDI measures the volumes of goods and services that New Zealand residents have command over. RGNDI is also affected by changes in the terms of trade, as well as the country’s net investment income and net transfer flows with the rest of the world.
International trade: December 2020 quarter has terms of trade export and import price movements.
Balance of payments and international investment position: December 2020 quarter has information on net investment income and transfer flows.
International growth comparisons – New Zealand and trade partners, December 2020 quarter
Countries around the world have had varying experiences of, and responses to, the COVID-19 pandemic. These differences, as well as structural differencies in their economies, should be taken into consideration when comparing the relative performance of countries.
|
Country |
Quarterly percentage change in GDP, December 2020 quarter |
Change from same quarter previous year |
|---|---|---|
|
New Zealand |
-1.0 |
-0.9 |
|
Australia |
3.1 |
-1.1 |
|
Canada |
2.3 |
-3.2 |
|
Euro area (19 countries) |
-0.7 |
-4.9 |
|
European Union (27 countries) |
-0.5 |
-4.6 |
|
Japan |
2.8 |
-1.3 |
|
OECD – total |
0.9 |
-3.1 |
|
United Kingdom |
1.0 |
-7.8 |
|
United States |
1.0 |
-2.4 |
|
Note: As at 16 March 2021. See OECD.Stat for GDP data covering other countries. Care should be taken when comparing New Zealand’s GDP figures with those of other countries, as the methodology used varies internationally. Stats NZ publishes both ‘average annual growth’ and ‘year on year’ (change from same quarter previous year) GDP growth rates. ‘Average annual growth’ is Stats NZ’s preferred measure, but it is not available from the OECD website for all countries each quarter. For more information on average annual growth and year on year growth, please see National accounts quarterlies – DataInfo+. |
||
Text alternative for Gross domestic product, industry growth and contribution to growth, December 2020 quarter
Image shows a column graph, pie chart, and bar chart showing growth, share of the economy, and contribution to growth in the December 2020 quarter for the primary, goods-producing, and services industries. Column chart shows that primary industries down 0.6 percent, goods-producing industries down 3.2 percent, and service industries up 0.1 percent. A pie chart shows that service industries make up about two-thirds of GDP, goods-producing industries about one-fifth and primary industries about one-twentieth. A bar chart shows industry contribution to the GDP growth rate: primary industries were flat, goods-producing contributed -0.6 percent, and services contributed 0.1 percent.
More data
Use Infoshare to access the national accounts time series.
Subject category: Economic indicators
Group: National accounts – SNA 2008
Structure of the economy
Here are some links showing the contribution to the New Zealand economy of different industries.
The gross domestic product data visualisation product is no longer produced, due to the closure of the Stats NZ archive website. ‘Gross domestic product: December 2020 quarter – visualisation CSV’ under Download data contains the underlying data previously used to produce this visualisation.
An interactive tool, Which industries contributed to New Zealand’s GDP, visually shows how the composition of industries contributing to New Zealand’s economy has changed through the years using national accounts data.
The tourism satellite account provides a picture of the role tourism plays in New Zealand, with information on the changing levels and impact of tourism activity.
Definitions and metadata
National accounts quarterlies – DataInfo+ provides the general methodology used to produce these statistics.
National accounts quarterlies – concepts – DataInfo+ provides the definitions of terms used in this release.
Gross domestic product: December 2020 quarter – changes and revision –DataInfo+ has details of revisions for this release.
Data and methodology considerations
We have continued the approach used in the June and September 2020 quarters of confronting our usual quarterly indicators against other data sources to identify instances where our usual quarterly indicators are unable to represent the actual level of activity through the quarter. Where appropriate we have used alternative data sources in place of the usual quarterly indicator.
December 2020 quarter gross domestic product and COVID-19 has details of the alternative data sources and changes in methods we applied.
There is generally a higher level of uncertainty associated with measuring the significant changes in economic activity as a result of the pandemic. We have used extra data and careful analysis to minimise this uncertainty. As more detailed and complete data about COVID-19’s impact becomes available, including through the 2021 and 2022 annual national accounts cycles, we expect revisions to our initial quarterly estimates. It is likely that these revisions will be of a greater magnitude compared to those observed in previous revision cycles.
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ISSN 1178-0290
Next release
Gross domestic product: March 2021 quarter will be released on 17 June 2021.
