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National Income Shows Strong Growth in 2014

In the March 2014 year, New Zealand earned $14.4 billion more as a country than in 2013, Statistics New Zealand said today. National disposable income was up 8.2 percent to $189.2 billion, in current prices, in the March 2014 year.

The growth was led by business profits, while income from employment also grew. Business profits were up $9.0 billion (9.8 percent), due to large growth in the dairy, construction, and financial services.

Compared with the strong growth in national income, growth in final consumption expenditure was modest (3.6 percent). This resulted in growth to national saving, continuing its upward trend since 2009.

“Growth in income outstripped the growth in expenditure across all sectors of the economy,” national accounts manager Gary Dunnet said.

Household saving was $2.8 billion in 2014 and has now been positive for the five years since the global financial crisis. Household incomes, such as salaries and income from farming, increased more than expenditure over this time.

Despite the increase in national saving, investment exceeded domestic saving in 2014. As a result, New Zealand continued to borrow from the rest of the world to fund investment.

Investment grew strongly in the March 2014 year, led by residential building and other construction. “Investment in fixed assets reached a new high of $50.9 billion in 2014,” Mr Dunnet said. This was a key driver of the increase in gross domestic product, which brought the size of the New Zealand economy to $231.0 billion.

Statistics New Zealand