You are here
New Zealand economy cools as construction slows
[Wellington] New Zealand's economy grew at a slower pace in the first three months of the year amid a fall in construction activity, official data released Thursday showed, with economists tipping no near-term interest rate hikes.
The January-March quarter growth of 0.5 per cent took the annual rate of expansion to 2.7 percent, and was broadly in line with analysts' forecasts.
It followed a 0.6 per cent expansion in the September-December period.
Statistics New Zealand said construction had cooled off, falling 1.0 per cent for the quarter, but still up 1.4 per cent for the year.
The 0.6 per cent growth in service industries helped offset the decline, the statistics body said.
Capital Economics' chief Australia and New Zealand economist Paul Dales said the weaker housing market was being reflected in the construction output.
"GDP growth is by no means falling off a cliff, but the end of the migration and housing booms have already caused a marked slowdown and they probably mean growth will ease to just 2.0 per cent next year," he said in a note.
"Against that backdrop, the RBNZ (Reserve Bank of New Zealand) is unlikely to raise interest rates until 2020."