New Zealand’s economy leaves Australia in its wake

While Australia bemoans a massive Budget deficit and
deep cuts to many areas of science, welfare and education, our cousins across
the Tasman are finding things are much rosier.

 

Courtesy of information from Statistics New Zealand and Deloitte Access Economics,
here’s a summary of the current New Zealand economy:

 

  • Economic growth prospects are suddenly looking stronger in
    NZ than they are in Australia.    The NZ Treasury
    estimates real GDP growth of 4.0% in 2014-15, while Australia is projected
    to grow at a more modest 2.5% in 2014-15 according to the recent Budget.

In the March 2014 quarter the number of people
employed in New Zealand increased by 22,000 (0.9 percent) in seasonally
adjusted terms. Over the year to March 2014, the number of people employed
rose 84,000    (3.7 percent) to 2,318,000 people. This is the largest
annual  increase in nearly ten years (December 2004 quarter) when the
increase was 90,000.  
 

·               
The
main contributors to the annual growth in NZ employment were the construction
industry (up 24,400 people, or 14 %) and the professional, scientific,
technical, administration, and support service industry group (up 17,700
people, or 7%).

·               
The
NZ labour force participation rate rose 0.4 percentage points to 69.3 percent
in the March 2014 quarter. NZ’s labour force
participation rate is now at the highest level
since the series began in 1986  , just surpassing the 69.2 percent seen in the
December 2008 quarter.  Over the year, the labour force participation rate
rose 1.4 percentage points. This is also the largest annual increase for the
series. Australia’s labour force participation rate is a much more modest
64.7%.

  • NZ’s recent economic outperformance is due to a combination
    of factors, not least its  growing trade relationship with China  (an
    annual gain of 51% compared to the previous year, and accounted for around
    22% of all exports).
  • NZ export growth has been led by a boom in demand for dairy
    products from Asia.  Over the year to March-2014, milk
    powder, butter and cheese exports advanced 31% to $NZ14.9 billion, with
    total dairy exports accounting for over 30% of total exports.
  • Other components of the NZ economy are also supporting the
    relatively rapid rate of economic growth underway  . 
    Housing construction activity has followed higher house prices recorded in
    recent years and is growing strongly, while private consumption and
    business/public investment are also slated to support positive economic
    growth over the medium term.
Might the traditional flow of
New Zealand workers into Australia be
about to decline?

 

 

I doubt the decisions made in
the recent Australian Federal Budget would be ones that provide a greater
incentive for Kiwi workers to pack up their life and head across the ditch.

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