COVID-19: Record GDP fall, ag sector suffers smallest drop

Gross domestic product (GDP) fell by 12.2% in the June 2020 quarter, Stats NZ announced this morning.

The quarterly fall is the largest recorded since the current series began in 1987.

The fall is comparable to many other countries amid the pandemic; the GDP in the same quarter in Australia fell 7%, Canada 11.5%, Japan 7.9%, the United Kingdom 20.4%, and 9.1% in the United States.

Some industries were more affected than others by the border closure and alert levels restrictions in place during the June quarter.

Agriculture, forestry, and fishing recorded the smallest drop, falling just 2.2%.

Retail trade and accommodation and transport, postal, and warehousing recorded the largest drops, falling 25.2% and 38.7% respectively.

Financial and insurance services was the only industry that grew, with a 0.7% increase.

“Industries like retail, accommodation and restaurants, and transport saw significant declines in production because they were most directly affected by the international travel ban and strict nationwide lockdown,” said national accounts senior manager Paul Pascoe.

New Zealand started the June 2020 quarter in alert level 4 lockdown, reaching alert level 1 on 8 June 2020.

“While level 4 restrictions were in place for most of April, the gradual return to level 1 over the course of the quarter meant that businesses were able to open up again and many people returned to places of work,” said Pascoe.

Annually, GDP fell by 2.0%. This is the first annual decline since the March 2010 quarter.