Jun 27, 2008

The GDP Number

As expected. We doubt that the dollar will crash, but it should continue its downward trajectory. The shock is agriculture. Indeed the dollar did fall a bit then it seems to have stabilised

Economic activity, as measured by gross domestic product (GDP), declined 0.3 percent in the March 2008 quarter, Statistics New Zealand said today. The agriculture and construction industries were the main contributors to the decline this quarter. This follows an increase in economic activity of 0.8 percent in the December 2007 quarter. In annual terms, the economy grew 3.0 percent to the year ended March 2008. Activity in the primary industries declined 4.1 percent in the March 2008 quarter. Agriculture was down 5.6 percent for the March 2008 quarter, the largest decline in agriculture since the March 1998 quarter. Drought conditions experienced by parts of the country contributed to lower output and increased costs (intermediate consumption) for the agriculture industry.

Activity in the goods producing industries was down 1.9 percent in the March 2008 quarter. The main drivers in the decline in the goods producing industries were construction (down 5.2 percent) and manufacturing (down 1.2 percent). Of the manufacturing industries the largest decline this quarter was in food, beverage and tobacco manufacturing. The decline in construction activity was in both residential and non-residential construction.