New Zealand economic growth surging ahead of living standards: critics

The dairy industry drove the New Zealand economy to its largest quarterly growth in almost four years in the quarter to the end of September, the government statistics agency said Thursday.

Dairy production, which accounts for about 5 percent of the economy, rebounded from last summer's severe drought and rose by 17 percent in the September quarter, pushing gross domestic product (GDP) up by 1.4 percent, according to Statistics New Zealand.

"The increase in agriculture is the largest in more than 25 years, as good weather boosted production well above the weak June quarter," acting national accounts manager Steffi Schuster said in a statement.

Dairy product manufacturing also increased, which contributed to a 1.5-percent rise in total manufacturing, although exports of dairy products fell.

Increases in agriculture and manufacturing production were partly offset by declines in construction, which was down 1 percent, and business services, which were down 0.8 percent.

Economic activity in the September quarter was 3.5 percent higher than in the September 2012 quarter.

Finance Minister Bill English said in a statement that the figures showed New Zealand had been one of the fast growing developed economies in the world.

The 3.5-percent annual economic growth compared with 2.3 percent in Australia, 1.8 percent in the United States, 1.9 percent in Canada, 2.4 percent in Japan, 1.5 percent in Britain and minus 0.4 percent in the euro zone, he said.

While English said the latest quarterly growth was reasonably widespread across the economy, the Council of Trade Unions (CTU) said most New Zealanders were still waiting to see the benefits of GDP growth.

"This growth is not flowing through to most people and is not working to raise living standards," CTU economist Bill Rosenberg said in a statement.

"Household consumption showed a fall in routine expenditure on things like groceries and other daily needs over the last six months," he said.

"We have had one quarter of relatively strong employment growth, but unemployment has fallen very little from its peak."