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New Zealand Q3 GDP Gains Just 0.3%

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New Zealand's gross domestic product advanced a seasonally adjusted 0.3 percent on quarter in the third quarter of 2018, Statistics New Zealand said on Thursday - marking the lowest quarterly growth since Q4 2013.

That was shy of expectations for an increase of 0.6 percent and down from 1.0 percent in the previous three months.

Primary industries grew 2.2 percent on quarter, while goods-producing industries fell 1.0 percent. Growth in service industries eased to 0.5 percent, while GDP per capita was flat and real gross national disposable income grew 0.9 percent.

Construction fell 0.8 percent in the September 2018 quarter. This fall was driven by a decrease in heavy and civil construction, as repair work on roads damaged in the Kaikoura earthquake continued to wind down. Modest growth in residential and non-residential building construction partly offset this decline.

Reduced infrastructure investment drove the 0.9 percent fall in gross fixed capital formation. Business investment fell 2.1 percent, with plant, machinery and equipment investment contributing to the decline. Annually, gross fixed capital formation was up 5.3 percent, despite two quarters of decline. Business investment was up 6.4 percent for the year.

Manufacturing fell 0.8 percent in the September 2018 quarter, with 6 of 9 manufacturing industries declining.

Agriculture, forestry, and fishing grew 0.8 percent in the September 2018 quarter, driven by strong growth in forestry and logging. This was reflected by increased exports of forestry products but offset by a small fall in agriculture after a strong June quarter. A decline in dairy production was reflected by reduced dairy product manufacturing and exports.

Mining grew 12 percent in the September 2018 quarter, as it started to bounce back from a significant drop in the June 2018 quarter.

Activity in the service industries rose 0.5 percent in the September 2018 quarter, the slowest rate of growth in six years. Of the 11 service industries, 9 demonstrated growth with no standout contributors. This follows growth of 1.0 percent in the June 2018 quarter, when all 11 service industries were up. The main drivers of the September 2018 quarter growth were rental, hiring, and real estate services (up 0.7 percent), and business services (up 0.6 percent).

Household spending grew 1.0 percent in the September 2018 quarter, the same growth rate seen in the June 2018 quarter.

On a yearly basis, GDP expanded 3.0 percent - exceeding expectations for an increase of 2.8 percent - which would have been unchanged from the three months prior.

The size of the economy in current prices was NZ$291 billion, for the September 2018 year.

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