Data released by Statistics New Zealand today showed a significant slowdown in the economy over the past six months, with GDP falling by 1% in September, and 1.1% in June said CTU Economist Craig Renney.
“The data shows that the size of the economy in GDP terms is now smaller than at any time since June 2022. GDP per capita has now fallen for 8 consecutive quarters, with the fall accelerating in the past six months. The economic situation is even worse than we thought, and that means even more hardship for workers heading into Christmas,” said Renney.
“With unemployment being a lagging indicator, the pain for working people in terms of unemployment is likely to be worse than previously thought.
“Revisions to data have increased the strength of the economy in the past, which have removed the recessions recorded over the past few years. We now know that the economy was growing consistently during 2023 on an annual basis, and we have only had one recession since COVID – which is now.
“The data demonstrated that GDP fell across 11 of 16 sectors last quarter. Output fell across both goods producing sectors and service industries. Business Investment fell -2.5% last quarter, with large falls in plant, machinery & equipment. Falling business investment is likely to mean lower productivity growth in the future, and fewer jobs.
“This isn’t a wake-up call for the government, it’s an alarm. Excluding COVID lockdowns, this is the fastest fall in production GDP over six months since June 1991. Government spending has fallen at the fastest rate since 1992 and the budgets of Ruth Richardson. The economy isn’t back on track, its derailed.
“We have just had a budget where the Government’s fiscal plans have clearly been shown to have failed. Unemployment is rising – and will likely rise more.
“The economy is now showing the impact of the Government’s policies – it’s been in office for a year. It’s clear that it’s time for a new approach, or we will all suffer the devastating economic consequences,” said Renney.