|Q/Q percent change||0.6%||0.2%||0.1%||0.3%|
|Y/Y percent change||2.2%||3.2%||2.7%|
Second quarter gross domestic product on the expenditure side was up 0.2 percent on the quarter and 2.2 percent when compared with the same quarter a year ago. As measured on the output side, GDP was up 0.4 percent on the quarter.
On the expenditure measure of GDP, domestic demand was strong (up 1.3 percent). Household spending was up 0.9 percent with increased spending on fruit and vegetables and big-ticket items including cars and furniture. Business investment also increased (2.2 percent) -- but this was offset by falling exports and rising imports.
Agricultural production increased 3 percent in the June 2015 quarter thanks to increased meat and dairy farming. Food, beverage and tobacco manufacturing was also up in the June 2015 quarter due to strong dairy product manufacturing. Inventories of meat and dairy products built up as exports of these goods declined. Mining also made a partial recovery from recent declines with a 2.5 percent increase in the latest quarter. The main driver was oil and gas extraction, but this was partly offset by decreases in coal mining and oil exploration.
The service industries were up 0.5 percent in the June 2015 quarter. However, it was a mixed picture at the lower level six industries grew and five declined. Growth was driven by business services (up 2.3 percent) and rental, hiring and real estate services (up 1.1 percent), but these gains were partly offset by a 1.8 percent decline in transport, postal, and warehousing the biggest drop since March 2009.
GDP data are a comprehensive measure of a New Zealand's overall production and consumption of goods and services. GDP serves as one of the primary measures of overall economic well-being. GDP calculates the total market value of goods and services produced in New Zealand within a given period after deducting the cost of goods and services used up in the process of production. Therefore, GDP excludes intermediate goods and services and considers final aggregates only. The New Zealand System of National Accounts (NZSNA) is a comprehensive accounting framework based on an international standard (System of National Accounts, 1993).
Gross domestic product (GDP) can be measured using three approaches, namely the production, income and expenditure approaches. The production measure of GDP is derived from firm level data and estimates the value added by all producing industries in the New Zealand economy. The income measure of GDP is derived from earnings data and estimates how the income earned from these producing industries is then distributed throughout the economy as returns to labor, capital and government. The expenditure measure of GDP is derived from data estimating spending on goods and services by final end users and includes consumption, investment and exports minus the value of imports.
GDP is the all-inclusive measure of economic activity. Investors need to closely track the economy because it usually dictates how investments will perform. Investors in the stock market like to see healthy economic growth because robust business activity translates to higher corporate profits. Bond investors are more highly sensitive to inflation and robust economic activity could potentially pave the road to inflation. By tracking economic data such as GDP, investors will know what the economic backdrop is for these markets and their portfolios. The GDP report contains a treasure-trove of information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. GDP components such as consumer spending, business and residential investment, and price (inflation) indexes illuminate the economy's undercurrents, which can translate to investment opportunities and guidance in managing a portfolio.