Close

Record contraction for Kiwi economy in 2010

The healthcare and social assistance sector was the biggest winner in 2010 while financial and insurance services recorded the biggest income fall, but overall Kiwi businesses saw the first decrease in total industry income in more than 10 years.

2010 incomeThe numbers don't lie: 2010 was a tough year for New Zealand. The healthcare and social assistance sector was the biggest winner in 2010 while financial and insurance services recorded the biggest income fall, but overall Kiwi businesses saw the first decrease in total industry income in more than 10 years.

According to Statistics New Zealand, economic activity last year contracted significantly, with both income and expenditure decreasing.

Total income for all New Zealand businesses fell 4.2 percent to $549.6 billion, the first fall in annual total industry income since its redeveloped Annual Enterprise Survey series began in 1999.

"These results show how the challenging economic climate in 2010 affected the financial performance of New Zealand businesses," industry and labour statistics manager Neil Kelly said. "The finance industry bore the brunt, but manufacturing and distribution industries were also affected by flat household spending and falling exports."

The financial and insurance services industry group showed the largest decrease in total income, down 13.8 percent to $64.2 billion. This was mostly due to falls in interest and dividends received.

The healthcare and social assistance industry group had the largest increase in total income, rising 5.7 percent to $24.5 billion.

Total expenditure for all New Zealand businesses fell to $497.7 billion, down 7.2 percent. Purchases and other operating expenses, which formed the largest component of total expenditure, decreased 3.8 percent, following a 2 percent increase in the 2009 financial year.

Although both total income and total expenditure dropped in 2010, surplus before income tax increased by nearly a third from the 2009 financial year to $50.8 billion. This was primarily because non-operating expenditure fell $14.4 billion.

The Annual Enterprise Survey provides annual financial performance and financial position information about businesses operating within New Zealand. The industries covered in the survey contribute approximately 90 percent of New Zealand’s gross domestic product.