On the surface, economic growth doesn't look too bad. Dig deeper and it's another story.

At a first glance, economic growth lately does not look too bad. At a closer look, the picture is more froth than beer.

The numbers the Government likes to brandish - two successive quarters in which gross domestic product rose 0.9 per cent - are flattered by strong population growth and don't capture a marked decline in export prices.

It is true that the economy expanded at a decent clip in the second half of last year. The first half, not so much.

So if you compare its output over the whole of 2015 with 2014, it recorded annual average growth of 2.5 per cent. That was down from 3.7 per cent the year before, but still a respectable number by international standards these days.

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But the population, swollen by net migration flows, grew by 1.9 per cent over the same period, so per capita GDP rose by a less impressive 0.6 per cent.

And that is a measure of output. What we really care about is incomes.

If dairy farmers produce more milk, GDP goes up. When the statisticians calculate national income, however, they adjust for the terms of trade - changes in the relative prices of the kinds of things New Zealand exports and the kinds of things it imports. Think of it as how many cars we can get for a container load of whole milkpowder.

That ratio, led by a plunge in dairy prices, has become a lot less advantageous over the past year.

So while national output grew 2.5 per cent last year, national income (real gross national disposable income, to give it its mouthfilling title) grew by 1.5 per cent.

And when adjusted for population growth, that meant national income per capita contracted by 0.4 per cent. It fell. It shrank. It went backwards.

Then there is the issue of the composition - or quality, if you like - of the growth.

When he was in the Opposition, Bill English liked to contrast growth in the tradables and non-tradables sectors of the economy.

The former encompasses the export and import-competing industries. The latter represents the domestic parts, like retail trade, that will do well when population growth is strong or when the wealth effect from rising house prices encourages homeowners to spend more than their incomes.

Over the past three years the tradables part of the economy has grown much more slowly than the rest: by 1.2, 0.5 and 1.6 per cent versus 2.6, 3.5 and 2.6 per cent respectively.

It is a longstanding trend. Since the year 2000, for example, non-tradables output has grown three times faster than tradables: a cumulative 53.7 per cent and 17.4 per cent respectively.

We see the same story in the breakdown of the latest GDP statistics. In the December quarter, the output of primary industries fell 1.4 per cent while the services sector grew 0.8 per cent.

Adjusted for population growth ... national income per capita contracted by 0.4 per cent. It fell. It shrank. It went backwards.

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There is nothing wrong with mortgage brokers, advertising executives or painters and decorators being busy, of course.

But it doesn't help the country earn its living as a trading nation, or service its external debt. In 2015 we ran a current account deficit of $7.7 billion and ended the year with net external liabilities of $151 billion, equivalent to 61 per cent of GDP.

Looking ahead, economists warn the broader economy has yet to feel the full flow-on effects of the collapse in dairy farmers' incomes.

Even so, the consensus among forecasters surveyed by the Institute of Economic Research this month is that economic growth over the year ahead will hold steady at 2.6 per cent before rising to 3 per cent in the year to March 2018.

What does that mean for job seekers?

The Ministry of Business, Innovation and Employment thinks employment growth in the March year just ended slowed to 1.7 per cent, from 3.4 per cent the year before.

It forecasts employment growth to recover a bit to 2.1 per cent in the year ahead and to average that sort of increase over the three years to 2019. The consensus among private sector forecasters is similar.

MBIE makes the point that those figures reflect expected growth in the number of jobs and do not include the job opportunities which arise as workers retire. While employment could rise by 48,000 over the year ahead, it says, it estimates another 30,000 people might be required to replace those retiring from the labour force.

In the near term, it says, high levels of net migration are likely to meet some of that demand.

In fact, the story of late has been that workforce growth from net migration (which includes the effect of fewer Kiwis leaving for overseas and more returning, as well as the foreign-born) has more or less matched growth in demand for labour. That kept a lid on wage growth even when jobs growth was brisk. MBIE forecasts the unemployment rate, now 5.3 per cent, to rise to 6 per cent over the year ahead before falling back to 5 per cent over the following two years, provided employment growth strengthens and net immigration slows as it expects.

It reckons labour productivity growth (the increase in output per hour of paid work) rose to 0.6 per cent in the year just ended, from 0.3 per cent the year before, but will slip back to 0.4 per cent in the year ahead.

These are not particularly cheerful numbers from the standpoint of wage growth.

Real wages have been boosted by exceptionally low inflation. But looking ahead, the consensus forecasts have real wage growth averaging 0.7 per cent a year over the next three years.

Is that the Hallelujah Chorus I hear? Thought not.

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Cutting through the politics, Business Editor at Large Liam Dann and economists Dominick Stephens and Chris Green dissect New Zealand’s immigration boom. Is it propping up growth and is it sustainable?

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