New Zealand's economy expanded 1.1 percent in the first quarter of 2012 compared to the previous three months, Statistics NZ said on Thursday.
That blew away forecasts for an increase of 0.4 percent, which would have been unchanged from the previous quarter after an upward revision from 0.3 percent.
On a yearly basis, GDP jumped 2.4 percent, also beating estimates for an increase of 1.3 percent following the 1.8 percent gain in the previous three months.
For the year ended March 2012, economic activity was up 1.7 percent compared with the year ended March 2011.
"This quarter we saw growth spread across a number of industries, while in previous quarters the industry picture had been more mixed with growth in some industries offset by falls in others," national accounts manager Rachael Milicich said.
Statistics NZ said the main contributors to the Q1 economic growth were manufacturing due to increases in primary food manufacturing and metal product manufacturing; business services, which include professional, scientific, technical, administrative, and support services; and agriculture, mainly driven by an increase in milk production.
"Continued good growing conditions have been a major factor in the growth this quarter, and is reflected in both the milk production in agriculture and in meat and dairy manufacturing," Milicich said.
The expenditure measure of GDP was up 0.8 percent in the March 2012 quarter. The main feature of this growth was investment in fixed assets, up 1.7 percent, mainly due to new investment in plant, machinery, and equipment.
The supply of goods produced exceeded demand this quarter leading to a $416 million build-up in inventories. Manufacturing production was up and more goods were imported, while exports fell 1.7 percent.
The volume of spending by New Zealand households increased 0.1 percent. While household spending in New Zealand fell this quarter, New Zealanders increased their spending abroad on overseas holidays.
For the year ending in March 2012, economic activity totaled NZ$202 billion, the agency said.
Upon the release of the data, the New Zealand dollar gained sharply against major rivals, trading near 0.8005 against the U.S. dollar, 1.2740 versus the Australian dollar, 63.65 against the yen and 1.5867 versus the euro.
by RTT Staff Writer
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