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National Accounts (Industry Benchmarks): Year ended March 2011
Embargoed until 10:45am  –  21 November 2013
Commentary

The National Accounts (Industry Benchmarks) provide comprehensive industry data on production, investment, and capital stock. This data was analysed in a supply-use balancing framework to reconcile the production, expenditure, and income measures of gross domestic product (GDP). It focuses on industry data and the benchmarks for the level of economic activity, which update and maintain the quality of quarterly GDP statistics. These statistics are available to the balanced March 2011 year.

Overview

Gross domestic product (GDP) represents the country's income earned from production in New Zealand. It includes income from production carried out by New Zealanders and by foreign-owned firms operating within New Zealand.

GDP in current prices (unadjusted for inflation) increased 4.6 percent in the year ended March 2011, compared with the previous year’s growth of 2.6 percent.

Other highlights for the year ended March 2011:

  • The size of New Zealand's economy (GDP) was $199.1 billion, compared with $190.4 billion in the March 2010 year.
  • New Zealand's GDP per capita increased 3.4 percent, to reach $45,448.
  • Exports and imports both increased significantly following falls in 2010. In dollar terms, exports increased by more than imports resulting in a record trade surplus of $4.7 billion.
  • Total investment (business and government) in fixed assets increased 1.2 percent following two years of decline.
  • The 2010 and 2011 Canterbury earthquakes occurred in the year ended March 2011. Losses in capital stock are reflected in this release.

This release incorporates some changes in the methodology for compiling the national accounts, which improves the relevance of our accounts. The major changes are for spending by international visitors to New Zealand and imports of low-value goods purchased directly by households.

See Data quality for more details.

Primary industries show strongest growth in production measure of GDP

The production measure of GDP measures the value of all goods and services produced within New Zealand (output), less goods and services used up in the production process (referred to as intermediate consumption). The difference between the output and intermediate consumption of an industry is its value added, or contribution to GDP.

Graph, Gross domestic product and gross domestic product per capita, current price, annual change, 2002 to 2011.

In 2011, GDP increased 4.6 percent to $199.1 billion. This is stronger than the 2.6 percent growth in 2010. Total output of the entire economy rose in 2011, by 5.1 percent to $396.0 billion. Intermediate consumption in 2011 was $211.9 billion, up 5.5 percent from 2010. GDP per capita rose 3.4 percent in 2011, to reach $45,448.

Graph, Annual growth in contribution to gross domestic product, by industry group, 2009, 2010, and 2011.

Primary industries continue strong growth

Primary industries include agriculture, forestry, and mining. In 2011, primary industries contributed 8.8 percent of total GDP.

Primary industries’ contribution to GDP increased in both 2010 and 2011, up 11.3 and 15.7 percent, respectively, from the previous year. This was the strongest growth of the five industry groups.

The increase from primary industries’ contribution to GDP in 2010 and 2011 was driven by growth in dairy prices and increased exports to China. In 2011, $1.3 billion of the increase was growth in the dairy cattle farming industry (up 27.7 percent).

Goods-producing industries show modest growth

Goods-producing industries include the manufacturing; electricity, gas, water, and waste services; and construction industries. In 2011, this industry group contributed 19.8 percent of total GDP.

The contribution goods-producing industries made to GDP increased 1.1 percent in 2011, to reach $39.4 billion. This increase is primarily driven by dairy product manufacturing (up $460 million from 2010), and the electricity and gas supply industry (up $420 million).

Distribution, accommodation, transport, and communications also up

The industries included in this group are retail trade, accommodation, and food services; wholesale trade; transport, postal, and warehousing; and information media and telecommunications. Together they contributed 18.9 percent of total GDP in 2011.

The contribution to GDP by this industry group rose to $37.5 billion in 2011, up 5.9 percent from $35.5 billion in 2010. A key contributor was the wholesale trade industry (up 9.8 percent).

Finance, insurance, and business services show moderate growth

Finance, insurance, and business services industries include financial and insurance services; rental, hiring, and real estate services; and professional, scientific, and technical services. Together they contributed 26.6 percent of total GDP in 2011. This group made the largest contribution to GDP of the five industry groups.

Their contribution to GDP increased 4.4 percent from 2010, to reach $53.0 billion in 2011.

Modest growth for government, health, education, and other services industries

Government, health, education, and other services industries’ contributed 18.4 percent of total GDP in 2011.

This industry group’s contribution to GDP rose 2.5 percent in 2011, to $36.6 billion.

Household consumption leads expenditure measure of GDP

GDP can also be measured by adding up spending on the goods and services produced in the economy, which shows how demand for these goods and services changes over time. This measure includes spending by households and government, investment in fixed assets, and trade with the rest of the world.

Graph, Change in the expenditure measure of gross domestic product, year ended March 2011.

In 2011, spending by households made the largest contribution to GDP growth in the expenditure measure, increasing 4.6 percent to $113.7 billion. This is the largest increase since 2008.

There was a $1.7 billion change in inventories in the March 2011 year. This shows that the level of inventories held by New Zealand business for future sale increased.

Central government expenditure increased 3.7 percent in the March 2011 year, to $35.2 billion. Local government spending was up 8.2 percent, to $4.7 billion.

Investment (gross fixed capital formation) increased 1.2 percent, following two years of declines. Investment for the 2011 year (37.3 billion) was $5.1 billion below the 2008 level of investment.

Exports and imports both increased significantly in 2011, following falls in 2010. Exports increased by more than imports, resulting in a record trade surplus of $4.7 billion. Exports of dairy products and logs had a large increase, particularly to China, while there was significant growth in the imports of vehicles (including parts and accessories), and petroleum and petroleum products.

Business profits drive growth in income measure of GDP

GDP can also be measured through income components within the economy. The income measure of GDP includes the returns received by the owners of capital and labour, taxes on production and imports, less subsidies.

Graph, Change in the income measure of gross domestic product, year ended March 2011.

For the March 2011 year, business profits (gross operating surplus) were up 6.0 percent, after a 4.0 percent increase in 2010. Profits were $86.7 billion in 2011 and $81.8 billion in 2010.

Graph, Change in business profits, year ended March 2011.

Compared with 2010, business profits increased across all industry groups in 2011: 

    • primary industries (up 19.6 percent) 
    • goods-producing industries (0.7 percent) 
    • distribution, accommodation, transport, and communication (9.1 percent) 
    • finance, insurance, and business services (4.0 percent) 
    • government, health, education, and other services (1.2 percent)

Compensation of employees includes all salary and wage payments to employees, whether in cash or in kind (such as fringe benefits). In 2011, compensation of employees was at $88.5 billion, up 3.2 percent from 2010.

Growth in compensation of employees occurred across all industry groups, with the biggest rise in primary industries (up 5.0 percent), closely followed by finance, insurance and business (up 4.4 percent), and distribution, accommodation, transport, and communication (up 4.0 percent).

Taxes on production and imports are taxes assessed on producers for the production, sale, purchase, and use of goods and services. They add to the market prices of those goods and services. This includes sales tax (GST), local authority rates, import and excise duties, and fringe benefit tax.

Taxes on production and imports grew 5.6 percent in 2011, an increase of $1.3 billion (to $24.8 billion).

Highlights for selected industries 

Dairy industries increase contribution to GDP 

The dairy cattle farming and dairy product manufacturing industries achieved significant growth in 2011. They contributed $7.2 billion (3.6 percent) of New Zealand’s GDP. From 2008 to 2011, the two industries contributed an annual average $6.5 billion to the economy, compared with an average of $3.7 billion in 2004–07.

Since 2008, milk prices have been the key driver of growth in these industries, with mixed weather conditions keeping volume growth modest. The higher prices have encouraged farmers to increase cattle numbers.

Graph, Dairy cattle farming and manufacturing contributions to gross domestic product, current price, annual, 2002 to 2011.

Agriculture Production Statistics: June 2011 (final) shows the total number of dairy cattle increased by over 900,000 in the four years from June 2007. This compares with the estimated 160,000 increase from June 2003 to 2007, when prices were lower.

The value of dairy exports also increased from 2008 to 2011.

Graph, Dairy exports, Current price annual, 2002 to 2011.

China has emerged as our major export market for dairy products, with exports increasing significantly since the free trade agreement between the two countries was signed in 2008. Exports valued at $0.4 billion in the year to March 2008 increased to $2.2 billion in the year to March 2011.

Graph, Dairy exports to China, current price, annual, 2002 to 2011.

See Dairy export prices and volumes move upwards over 20 years for more about dairy exports.

Finance industry declines after two years of strong growth

Finance and insurance services contribution to GDP was $10.2 billion in 2011, compared with $11.0 billion in 2010.

The finance industry made the main downward contribution, down 11.3 percent from 2010, after two years of high growth. Despite the decline in 2011, this industry has grown an average of 8.6 percent a year over a 10-year period.

In 2010, financial intermediation services indirectly measured (FISIM) output grew significantly. This reflected a large margin between loan and deposit interest rates following the global financial crisis. This margin reduced to closer to the long-term average in 2011, leading to a decrease in FISIM and the finance industry.

Graph, Financial and insurance services contributions to gross domestic product, current price, annual, 2002 to 2011.

Balanced national accounts

Revisions have resulted from balancing the production and expenditure estimates of GDP within a supply and use framework for 2010 and 2011. Because of this work, additional industry and investment analysis is now available up to the March 2011 year.

See Revisions for more information.

See Definitions for more information about the different measures of GDP.

For more detailed data see the Excel tables in the ‘Downloads’ box.

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