Archived publication
This publication is no longer current or has been superseded.
This report card has been superseded by the October 2012 Household Consumption Expenditure Environmental Indicator Update.
Household consumption expenditure measures the volume of expenditure on goods and services by New Zealand households. Household consumption expenditure is a key component of the New Zealand economy, accounting for around 60 per cent of all expenditure on goods and services in New Zealand each year (ie, GDP expenditure) and represents a pressure on the environment.
In general, as household consumption expenditure increases, so too does the use of natural resources (eg, land and water), energy and transport; the generation of waste and greenhouse gas emissions; and air, water and soil pollution.
Although recognising the economic and social aspects of household consumption expenditure, the information in this report card is assessed from an environmental perspective. For example, an increase in household consumption expenditure can be considered positive from an economic and social perspective (eg, a growing economy and an increased standard of living). Conversely, an increase in household consumption expenditure can be considered negative from an environmental perspective (eg, a depletion of natural resources).
CURRENT SITUATION: In the year ending March 2008, real household consumption expenditure in New Zealand was $82.1 billion (ie, in real or volume terms with the effect of inflation removed). On average, real household consumption expenditure per household was about $53,950, and real household consumption expenditure per person was $19,350. The top three household consumption expenditure categories were food and beverages, housing, and transport.
TREND: Two more years of real data are available since we last reported on household consumption expenditure. In that time, New Zealand’s total household consumption expenditure continued to increase, as did expenditure per person and per household. However, the increases were not as large as in previous years.
While increases in total household consumption expenditure are driven in part by population growth, the increases in expenditure per person and per household show New Zealanders are buying a greater volume of goods and services than in the past. This trend is similar to other developed countries.
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INTERNATIONAL COMPARISON: In 2006, New Zealand had the 8th lowest household consumption expenditure per person out of 29 Organisation for Economic Co-operation and Development (OECD) countries. New Zealand’s household consumption expenditure per person was 11 per cent less than the OECD average.
FUTURE WATCH: While we don’t yet have data for the year ending March 2009, real household consumption expenditure is expected to decline, following a fall in the June 2008 quarter, and a flat performance in the September 2008 and December 2008 quarters.
Real GDP expenditure is also expected to fall in the year ending March 2009 (NZIER, 2009). Contributing factors include the global recession, drought (reducing dairy production and export volumes), and high mortgage interest rates in the 2008 calendar year dampening household consumption expenditure.
For the year ending March 2010, household consumption expenditure is predicted to increase modestly due to the recent reduction in interest rates, relatively high wage inflation, tax cuts in April 2009, and growing immigration (NZIER, 2009). However, this increase in expenditure may be offset in part by rising unemployment, and resulting caution around increasing household expenditure.
In the longer term, recovery from the recession, population growth and an increase in the share of one-person households (which, on average, use more goods and services per person than larger households) are predicted to drive an increase in total, per household and per person household consumption expenditure.
Consumption is the purchase and use of goods and services. Household consumption includes the goods and services we buy and use on a daily basis in our homes, from furniture to household appliances, and the electricity to run them. Household consumption also includes the food and beverages we consume and the transport we use to make our daily trips to and from home.
Household consumption contributes to a large proportion of New Zealand’s total consumption of goods and services. However, it is difficult to measure the physical volume of good and services consumed by New Zealand households. Instead, we measure the expenditure on goods and services by New Zealand households. This is called household consumption expenditure.
There are two ways household consumption expenditure can increase or decrease over time:
This report card is concerned with changes in the volume of goods and services purchased by households. To report this, the report card uses ‘real’ household consumption expenditure data, which has had the impact of inflation (or deflation) removed. This is why the report card uses 1995/96 prices to report the volume of expenditure on goods and services by New Zealand households. This also allows comparisons to be made through time.
As described in Environment New Zealand 2007, household consumption expenditure can be broken down into nine categories (table 1). For more information about household consumption expenditure see chapter 3 of Environment New Zealand 2007 (Ministry for the Environment, 2007).
| Category | Description |
|---|---|
| Food and beverages | Retail food and alcoholic and non-alcoholic drinks. |
| Clothing and footwear | Clothing, footwear, and clothing and footwear repairs. |
| Housing1 | Rent, imputed rent of owner-occupied dwellings, rental expenses and maintenance of rental dwellings. |
| Household goods and services | Fuel and electricity for the home, furniture, major appliances, floor cover laying, curtains, textiles and tableware. |
| Transport | New and used vehicle purchase, vehicle repair, maintenance and operation, and purchased transport. |
| Hotels and restaurants | Food and beverages purchased in restaurants, takeaways and accommodation. |
| Recreation and education2 | Government education, private education, holiday recreation, retail recreational goods and gambling. |
| Health and medical2 | Medical services, charges, goods and insurance. |
| Other goods and services | Personal goods and services, post and telephone, and services not classified elsewhere. |
Notes:
(1) Housing excludes house purchases and mortgage payments, but does include an estimated rent for owner-occupied dwellings.
(2) The recreation and education category and the health and medical category shown in table 1 are not discussed in depth in this report card, because complete data sets for each category are unavailable. Where they are reported, the two categories are combined.
Source: Statistics New Zealand.
Environment New Zealand 2007, the country’s second national state of the environment report, provided information from around 115 national-scale environmental data sets. Its primary focus was to report on the 66 national data sets that constitute New Zealand’s core set of 22 environmental indicators. These indicators cover 10 domains: four ‘pressures’ on the environment (consumption, road transport, energy and waste), and six ‘states’ of the environment (air, atmosphere, land, fresh water, oceans and biodiversity).
A key focus of the Ministry for the Environment’s national environmental reporting programme is to produce a series of ‘report cards’ to provide updated information on the indicators reported in Environment New Zealand 2007. This is one such report card.
This environmental report card provides information on recent trends in household consumption expenditure – one of New Zealand’s core environmental indictors. Two more years of data are available since we last reported on this issue in Environment New Zealand 2007.
This report card looks at:
The data in this report card is reported in 1995/96 prices. This removes the impact of price change (ie, inflation and deflation), and allows comparisons to be made through time.
Households are a major driving force in New Zealand’s economy. Household consumption expenditure is the largest contributor to expenditure on gross domestic product (a measure of economic activity) in New Zealand – in the year ending March 2008, expenditure by households accounted for around 60 per cent of gross domestic product (GDP) expenditure (see figure 1).1

Source: Statistics New Zealand, 2008a; Statistics New Zealand, 2008b.
Text description for figure 1.
Household consumption expenditure is widely recognised and used internationally as a good indicator of the pressures that consumption can put on the environment (see next section). It is also easily assessed across countries, allowing international comparisons to be made (see below).
Although recognising the economic and social aspects of this indicator, the information in this report card is assessed from an environmental perspective. For example, an increase in household consumption expenditure can be considered positive from an economic and social perspective (eg, a growing economy and an increased standard of living). Conversely, an increase in household consumption expenditure can be considered negative from an environmental perspective (eg, a depletion of natural resources – see next section).
As incomes rise so does consumption and demand for more food and beverages, for larger, warmer and more convenient living spaces, for appliances, furniture and cleaning materials, for clothes, transport and energy (European Environment Agency, 2007, p266).
The demand for goods and services by households “is a major source of pressure on resources and the environment” (European Environment Agency, 2001a). Our purchasing choices directly and indirectly involve the consumption of natural resources and the generation of waste, as goods and services are produced and delivered. The purchase of goods and services can also be directly linked to harmful environmental effects (for example, air pollution produced in manufacturing processes).
Generally speaking, as household consumption grows, environmental pressures also grow (Organisation for Economic Co-operation and Development, 2001). Increasing household consumption can reflect:
However, the volume of expenditure on goods and services by households is not necessarily a direct measure of the environmental impacts of these goods and services. This is because the links between consumption, economic growth, and environmental impact are not straightforward, for example:
Other actions to reduce the environmental impacts of consumption include:
In Europe, consumption categories identified as causing the greatest environmental impacts when their full life cycle is considered are food and beverages, private transport and housing (including energy consumption and construction) (European Environment Agency, 2007).
Closer to home, New Zealand households:
Because New Zealanders also purchase imported goods and services, our household consumption patterns can contribute to environmental impacts in other regions of the world (eg, deforestation, biodiversity loss, impacts on flows of materials, and depletion of fish stocks) (Organisation for Economic Co-operation and Development, 2001).
Although developed countries have made some progress in reducing the environmental impacts of their consumption, environmental pressures from consumption continue to grow in Organisation for Economic Co-operation and Development (OECD) member countries (Organisation for Economic Co-operation and Development, 2001).
A number of demographic factors affect household consumption expenditure in New Zealand. Household consumption expenditure tends to increase with an increase in:
The more people and households there are, the higher the consumption of goods and services. Household size is also important – on average, one-person households use more goods and services per person than larger households (European Environment Agency, 2001b). For example, it takes the same amount of electricity to heat a living room for three people as it does for one person.
Between 1992 and 2008, the population of New Zealand increased by 21 per cent (see the dark blue line in figure 2). In this same period, the number of households increased by 27 per cent (see the light blue line in figure 2) and the share of one-person households also increased (between 1991 and 2006, the share of one-person households increased by 14 per cent) (Statistics New Zealand, 2004; Statistics New Zealand, 2007b). Consequently, between 1992 and 2008, the average number of persons per household in New Zealand decreased by 5 per cent, to 2.79 (see the orange line in figure 2).

Source: Statistics New Zealand, Unpublished a; Statistics New Zealand, Unpublished b.
Text description for figure 2.
Other factors affecting household consumption expenditure patterns include:
For more on this, see Environment New Zealand 2007 (Ministry for the Environment, 2007).
In the March 2008 year, on average, real household consumption expenditure was $53,943 per household and $19,350 per person.
In the year ending March 2008, real household consumption expenditure in New Zealand was $82.1 billion (table 2).4 On average, real household consumption expenditure per household was $53,943, and real household consumption expenditure per person was $19,350.
| Category | Total household consumption expenditure (million $) |
Household consumption expenditure per household ($) |
Household consumption expenditure per person ($) |
|---|---|---|---|
| Food and beverages | 13,989 | 9,195 | 3,299 |
| Housing1 | 13,586 | 8,930 | 3,203 |
| Transport | 12,542 | 8,244 | 2,957 |
| Household goods and services | 10,970 | 7,211 | 2,587 |
| Other goods and services | 9,241 | 6,074 | 2,179 |
| Hotels and restaurants | 5,989 | 3,937 | 1,412 |
| Clothing and footwear | 4,406 | 2,896 | 1,039 |
| Recreation and education and health and medical combined2 | 12,860 | 8,453 | 3,032 |
| Net tourist expenditure3 | -1,518 | -998 | -358 |
| Total4 | 82,065 | 53,943 | 19,350 |
Notes:
Source: Statistics New Zealand, 2008a; Statistics New Zealand, Unpublished a; Statistics New Zealand, Unpublished b.
Long-term real data shows that between 1992 and 2008, New Zealand’s total household consumption expenditure increased by 76 per cent. In this time, household consumption expenditure per person increased by 46 per cent, and household consumption expenditure per household increased by 39 per cent (table 3 and figure 3).
| Household consumption expenditure | 1992 | 2008 | Percentage change between 1992 and 2008 |
|---|---|---|---|
| Total expenditure ($ million) | 46,549 | 82,065 | 76% |
| Per household ($) | 38,829 | 53,943 | 39% |
| Per person ($) | 13,278 | 19,350 | 46% |
Source: Statistics New Zealand, 2008a; Statistics New Zealand, Unpublished a; Statistics New Zealand, Unpublished b.
Between 1992 and 2008, real household consumption expenditure per person increased by 46 per cent.
In the period 1992–2008, New Zealand’s population increased by 21 per cent (see figure 2). Although this increase in population accounts for some of the increase in total household consumption expenditure noted above, it does not account for all of it.
Between 1992 and 2008, per person real household consumption expenditure increased by 46 per cent (or $6,072) (table 3 and the orange line in figure 3). This means that, on average each New Zealander is consuming a greater volume of goods and services than in the past. This is consistent with what has happened in other OECD countries – according to the OECD, “per capita private consumption has increased steadily in OECD countries over the last two decades, and is expected to continue to follow GDP growth in the period to 2020” (Organisation for Economic Co-operation and Development, 2002).
Between 1992 and 2008, the number of households in New Zealand increased by 27 per cent (see figure 2). Again, this trend accounts for some of the increase in total household consumption expenditure, but not all of it.
Between 1992 and 2008, real household consumption expenditure per household increased by 39 per cent (or $15,114) (table 3 and the light blue line in figure 3). This means that, on average, each household in New Zealand is consuming a greater volume of goods and services than in the past.

Source: Statistics New Zealand, 2008a; Statistics New Zealand, Unpublished a; Statistics New Zealand, Unpublished b.
Text description for figure 3.
Economic growth and household consumption expenditure are closely linked – as described in the introduction, household consumption expenditure is a large component of GDP expenditure (see figure 1).
Between 1992 and 2008, real GDP expenditure and real household consumption expenditure both increased, but at different rates – real GDP expenditure increased by 73 per cent, while real household consumption expenditure increased by 76 per cent (see the solid light blue and dashed light blue lines in figure 4). As expected, household consumption expenditure increased as GDP expenditure increased, but since 2005, household consumption expenditure has increased at a faster rate than GDP expenditure. This is seen in figure 4 where the three solid household consumption expenditure lines (total, per household and per person) cross the three dashed GDP expenditure lines.
Not only are New Zealand households on average consuming a greater volume of goods and services than in the past, they are accounting for an increasing share of GDP expenditure than in the past (see figure 1).
Source: Statistics New Zealand, 2008a; Statistics New Zealand, 2008b; Statistics New Zealand, Unpublished a; Statistics New Zealand, Unpublished b.
Text description for figure 4.
Two more years of data are available since we reported household consumption expenditure in Environment New Zealand 2007 (see the new data presented in figure 3). Over that time, total household consumption expenditure in New Zealand continued to increase, as did household consumption expenditure per person and per household.
The rate of increase has slowed, however – figure 3 shows the rates of increase in total, per household and per person household consumption expenditure all easing off in the past two years, compared to the two years before. For example, between 2004 and 2006, total household consumption expenditure increased by 9.8 per cent, while between 2006 and 2008, it increased by 6.1 per cent.
Household consumption expenditure is also reported quarterly by Statistics New Zealand – in the March 2008 quarter, total household consumption expenditure decreased by 0.5 per cent, the first quarterly decline since the June 2004 quarter (Statistics New Zealand, 2009a).6 For more on this and quarterly changes in household consumption expenditure beyond March 2008, see the Future watch section below.
Table 4 provides a breakdown of household consumption expenditure by category in New Zealand for the year ending March 2008.7 Again, the data are reported in 1995/96 prices to remove any inflationary effect, and allow comparisons to be made through time. The top three consumption categories for the year ending March 2008 were food and beverages (accounting for 16.7 per cent of household consumption expenditure), housing (16.3 per cent),8 and transport (15 per cent) (see figure 5). As noted above, in Europe, these three consumption categories are identified as causing the greatest environmental impacts when their full life cycle is considered (European Environment Agency, 2007).

Note: Due to rounding, figures do not add up to 100 per cent.
Source: Statistics New Zealand, 2008a.
Text description for figure 5.
Between 1992 and 2008, household consumption expenditure in New Zealand increased across all categories (table 4 and figure 6). During this time, food and beverages, housing and transport have consistently been the top three expenditure categories. In 2006, the food and beverage category overtook the housing category for the top place, where it has remained since (table 4 and figure 6).9 This trend may reflect greater discretionary income and an increase in expenditure beyond that of basic necessity to ‘luxury’ food and beverage items. It may also reflect increased incomes in low income households, enabling increased expenditure on basic necessity food and beverage items.
| Categories | 1992 |
2008 |
Percentage change |
|---|---|---|---|
| Food and beverages | |||
| Expenditure (million $) | 8,045 | 13,989 | 74% |
| Per person ($) | 2,295 | 3,299 | 44% |
| Per household ($) | 6,711 | 9,195 | 37% |
| Housing | |||
| Expenditure (million $) | 10,704 | 13,586 | 27% |
| Per person ($) | 3,053 | 3,203 | 5% |
| Per household ($) | 8,929 | 8,930 | <0.5% |
| Transport | |||
| Expenditure (million $) | 7,034 | 12,542 | 78% |
| Per person ($) | 2,006 | 2,957 | 47% |
| Per household ($) | 5,867 | 8,244 | 41% |
| Household goods and services | |||
| Expenditure (million $) | 4,948 | 10,970 | 122% |
| Per person ($) | 1,411 | 2,587 | 83% |
| Per household ($) | 4,127 | 7,211 | 75% |
| Other goods and services | |||
| Expenditure (million $) | 5,307 | 9,241 | 74% |
| Per person ($) | 1,514 | 2,179 | 44% |
| Per household ($) | 4,427 | 6,074 | 37% |
| Hotels and restaurants | |||
| Expenditure (million $) | 3,172 | 5,989 | 89% |
| Per person ($) | 905 | 1,412 | 56% |
| Per household ($) | 2,646 | 3,937 | 49% |
| Clothing and footwear | |||
| Expenditure (million $) | 2,208 | 4,406 | 100% |
| Per person ($) | 630 | 1,039 | 65% |
| Per household ($) | 1,842 | 2,896 | 57% |
Source: Statistics New Zealand, 2008a; Statistics New Zealand, Unpublished a; Statistics New Zealand, Unpublished b.

Source: Statistics New Zealand, 2008a; Statistics New Zealand, Unpublished a.
Text description for figure 6.
There has been a shift in expenditure patterns across the household consumption categories between 1992 and 2008. The volume of expenditure in some categories has grown at a faster rate than others (table 4 and figure 7). For example, between 1992 and 2008, expenditure per person increased by:
Source: Statistics New Zealand, 2008a; Statistics New Zealand, Unpublished a.
Text description for figure 7.
The proportion of household consumption expenditure in some categories also changed from 1992 to 2008:
The share of household consumption expenditure for the other five categories (food and beverages, clothing and footwear, transport, hotels and restaurants, and other goods and services) remained largely the same between 1992 and 2008 (Statistics New Zealand, 2008a).
The shifts in expenditure patterns across the consumption categories over this period may reflect higher levels of income and therefore higher levels of discretionary expenditure (eg, on hotels and restaurants and certain household goods and services, such as non-essential appliances).
Two more years of data are available since we last reported this indicator in Environment New Zealand 2007. In these two years, total household consumption expenditure increased across all consumption categories (Statistics New Zealand, 2008a). In these same two years, household consumption expenditure per household and per person increased in all except two categories – hotels and restaurants and transport (see figure 7 for per person changes).
The rate of per household and per person expenditure on hotels and restaurants slowed in the year ending March 2007 compared to the previous five years (the orange line in figure 7). In the following year (ie, the year ending March 2008), per household and per person expenditure on hotels and restaurants dropped very slightly.
In the year ending March 2007, per household and per person expenditure on transport fell (the red line in figure 7). This fall in expenditure on transport is reflected in the decrease in the distance travelled (also known as vehicle kilometres travelled, or VKT) per person by road in the 2006 calendar year (Ministry of Transport, 2008).
However, per household and per person expenditure on transport increased in the year ending March 2008 (figure 7). In the 2007 calendar year, VKT per person also increased (Ministry of Transport, 2008). For more on the VKT environmental indicator see the Ministry for the Environment’s 2009 Vehicle Kilometres Travelled by Road Environmental Report Card (Ministry for the Environment, 2009).
In 2006, New Zealand had the 8th lowest household consumption expenditure per person out of 29 OECD countries.
Household consumption expenditure is widely recognised and used internationally as a good indicator of the pressures that consumption can put on the environment. It is also easily assessed across countries, allowing international comparisons to be made.
Latest OECD data for 2006 shows that New Zealand’s household consumption expenditure was US$15,300 per person, 11 per cent less than the OECD average of US$17,000 (Organisation for Economic Co-operation and Development, 2008). Figure 8 shows New Zealand’s per person household consumption expenditure ranking in the OECD, along with the top and bottom three ranked countries. Overall, New Zealand had the 8th lowest household consumption expenditure per person out of 29 OECD member countries. The United States had the highest household consumption expenditure per person in the OECD, at more than twice that of New Zealand.
Countries with similar per person household consumption expenditure to New Zealand in 2006 included Sweden and Finland. Looking to our closest OECD neighbour, Australia’s household consumption expenditure per person in 2006 was 29 per cent higher than that of New Zealand, and Australia had the 8th highest household consumption expenditure per person in the OECD.
While having the 8th lowest household consumption expenditure in the OECD may be considered good from an environmental perspective, it may not be considered good from a social perspective (in terms of people’s standard of living) or from an economic perspective.

Note: Numbers on the x-axis represent a ranking among 29 OECD countries.
Source: Organisation for Economic Co-operation and Development, 2008.
Text description for figure 8.
A Household Economic Survey is carried out by Statistics New Zealand every three years. The 2006/07 Household Economic Survey sampled approximately 4500 households from urban and rural areas throughout New Zealand. The survey collects income, expenditure and demography information on households and individuals (Statistics New Zealand, 2007a).
The results of the survey are broken down into five regions: Auckland, Wellington, the rest of the North Island, Canterbury, and the rest of the South Island. Information was gathered across 12 expenditure groups: food, alcohol and tobacco, clothing and footwear, housing (eg, rent and mortgage payments) and housing utilities (eg, household energy), household contents and services, health, transport, communication, recreation and culture, education, miscellaneous goods and services, and other expenditure (Statistics New Zealand, 2007a).
For the year ending June 2007, the survey found that New Zealand’s average weekly household expenditure was $956. New Zealand’s average weekly household income for the June 2007 quarter was $1445, therefore on average each household spent two-thirds of its income (Statistics New Zealand, 2007c).
Of the five regions, Wellington had the highest average weekly household expenditure at $1103, which was 15 per cent higher than the national average, followed by Auckland at $1046. The ‘rest of the North Island’ had the lowest average weekly household expenditure at $818 (figure 9).
In this same period, average weekly incomes per person for these five regions in New Zealand followed the same pattern as regional weekly household expenditure shown in figure 9 (ie, Wellington had the highest weekly income per person followed by Auckland, and ‘rest of the North Island’ had the lowest)(Statistics New Zealand, 2008d). The more you earn, the more you spend, therefore it is reasonable to expect Auckland and Wellington to show the highest levels of spending of the surveyed regions (Statistics New Zealand, 2001b).

Source: Statistics New Zealand 2007e.
Text description for figure 9.
The three largest components of weekly household expenditure in 2006/07 were housing and household utilities (ie, household energy) (23 per cent on average), food (16 per cent on average), and transport (14 per cent on average) (Statistics New Zealand, 2007a). As might be expected these top three weekly household expenditure groups echo the top three household consumption expenditure categories for the year ending March 2008, as reported above (ie, food and beverages, housing and transport).
Of all the regions, Wellington spent the most on housing and household utilities, a third higher than the national average, followed by Auckland (Statistics New Zealand, 2007d). The Auckland region spent the most on food (13 per cent higher than the national average), followed by Wellington (Statistics New Zealand, 2007d). The Auckland region spent the most on transport (9 per cent above the national average), followed by the rest of the South Island (Statistics New Zealand, 2007d). Although it had the highest average weekly household expenditure, the Wellington region spent the least on transport (7 per cent below the national average) (Statistics New Zealand, 2007d).
This section draws on Statistics New Zealand’s most recent quarterly snapshots of the performance of the economy, and a recent NZIER economic forecast for New Zealand (Statistics New Zealand, 2009b; NZIER, 2009).
New Zealand’s real GDP fell 0.3 per cent in the March 2008 quarter, 0.2 per cent in the June 2008 quarter, 0.5 per cent in the September 2008 quarter, and 0.9 per cent in the December quarter,11 placing New Zealand’s economy in recession (Statistics New Zealand, 2009c).12
Contributing factors include:
The last time the New Zealand economy contracted for four consecutive quarters was in 1989/90 (Statistics New Zealand, 2009d).
Reflecting these recent contractions in real GDP, real household consumption expenditure fell by 0.5 per cent in the March 2008 quarter,13 by 0.2 per cent in the June 2008 quarter, and remained flat in the September 2008 and December 2008 quarters (Statistics New Zealand, 2009a).
Given these quarterly results, real household consumption expenditure is expected to fall in the year ending March 2009. New Zealand’s real GDP expenditure is also forecast to fall, by 1.5 per cent for the year ending March 2009, due to falls in real household consumption expenditure, investment and net exports (NZIER, 2009).
For the year ending March 2010, household consumption expenditure is predicted to increase modestly due to the recent reduction in interest rates, relatively high wage inflation, tax cuts in April 2009, and growing immigration (NZIER, 2009). However, this increase in expenditure may be offset in part by rising unemployment. Although New Zealand entered the recession with the lowest unemployment rate on record (3.4 per cent), the unemployment rate is predicted to rise above 6 per cent by March 2010 (NZIER, 2009). This is a conservative estimate, and other forecasters predict a higher rise in unemployment (NZIER, 2009). This trend, along with concerns about job security, is likely to lead to caution around increasing household expenditure (NZIER, 2009). If unemployment rates rise beyond that predicted, households may choose to increase their precautionary savings levels, and exercise further caution around expenditure.
In line with predictions for household consumption expenditure, real GDP expenditure is forecast to resume growth for the year ending March 2010, albeit slowly (NZIER, 2009). It is estimated that the New Zealand economy will take four years to recover from recession and return to an annual GDP growth of 3 per cent (NZIER, 2009).
New Zealand’s population is projected to increase by 12 per cent between 2008 and 2021 (Statistics New Zealand, 2007e).14 The number of households in New Zealand is also projected to increase over this period (Statistics New Zealand, 2005). Total household consumption expenditure is likely to increase in line with these increases, however, in the short term this may be offset by households exercising caution in expenditure due to the recession (see the previous section).
The trends in the increasing share of one-person households and reducing household size are also projected to continue. By 2021, the share of one-person households is projected to rise to 26.5 per cent,15 and the average household size is projected to drop to 2.4 persons per household (Statistics New Zealand, 2005). If these trends do continue, household consumption expenditure is likely to continue to increase on a per person basis.
For further information on household consumption expenditure see Environment New Zealand 2007 at: www.mfe.govt.nz. For information on practical steps to reduce your household consumption visit: www.mfe.govt.nz/publications/ser/enz07-info-sheets-jun08/enz07-household-consumption-info-sheet-jun08.pdf.
Statistics New Zealand releases three-monthly snapshots of the performance of the economy, including household consumption expenditure at: www.stats.govt.nz/methods_and_services/information-releases/gross-domestic-product.aspx.
The recreation and education category and the health and medical category are unable to be discussed in depth in this report card, because complete data sets for each category are unavailable. Where they are reported, the two categories are combined.
The volume of expenditure on goods and services by households is not necessarily a direct measure of the environmental impacts of these goods and services. This is because the links between consumption, economic growth and environmental impact are not straightforward, for example:
However, household consumption expenditure is widely recognised and used internationally as a good indicator of the pressures that consumption can put on the environment. It is also easily assessed across countries, allowing international comparisons to be made.
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Statistics New Zealand. 2009a. Gross Domestic Product: December 2008 Quarter – QGDP(E) Chain-volume. Table 1B4: Household Consumption Expenditure by Purpose. Seasonally Adjusted Chain-volume Series Expressed in 1995/96 Prices. (Retrieved 1 April 2009).
Statistics New Zealand. 2009b. Gross Domestic Product: December 2008 Quarter – Hot off the Press. (Retrieved 1 April 2009).
Statistics New Zealand. 2009c. Gross Domestic Product: December 2008 Quarter. Table 1.1 Gross Domestic Product: Revisions Summary. (Retrieved 1 April 2009).
Statistics New Zealand. 2009d. Gross Domestic Product: December 2008 Quarter – QGDP(P) Chain-volume. Table 1P1: Gross Domestic Product by Industry, Seasonally Adjusted Chain-volume Series Expressed in 1995/96 Prices. (Retrieved 3 March 2009).
2. This includes desktop computers, laptop computers and hand-held computers.
3.Note that the 2001 Household Economic Survey asked about ‘home computers’ only, rather than desktop, laptop and hand-held computers.
4. Note that in current prices, household consumption expenditure in New Zealand for the year ending March 2008 was $101,143 million, household consumption expenditure per household was $66,483 and household consumption expenditure per person was $23,849 (Statistics New Zealand, 2008c; Statistics New Zealand, Unpublished a; Statistics New Zealand, Unpublished b).
5. Trends are described from 1992 onwards, as this is when Statistics New Zealand’s ‘estimated resident population’ data set starts.
6. This fall in the March 2008 quarter was offset by increases in the previous three quarters, which resulted in an overall increase in household consumption expenditure for the year ending March 2008 (figure 3).
7. The recreation and education category and the health and medical category are excluded from detailed discussion because complete data for each category is unavailable.
8. Housing excludes house purchases and mortgage payments, but does include an estimated rent for owner-occupied dwellings.
10. We cannot report any more detail than this because complete data sets for each category are unavailable.
11.These quarterly percentage changes are based on production-based real GDP. This, rather than expenditure-based GDP, is the preferred measure for quarter-on-quarter change because it has historically shown less volatility (Statistics New Zealand, 2009b).
12. The common definition of recession is two consecutive quarters of economic contraction.
13. This fall in the March 2008 quarter was offset by increases in the previous three quarters, which resulted in an overall increase in household consumption expenditure for the year ending March 2008 (figure 3).
14. This population projection is the fifth (ie, middle) of nine population projections by Statistics New Zealand. It assumes medium fertility and mortality rates, and a net annual migration of 10,000.
15. In 2006, the share of one-person households was 23 per cent (Statistics New Zealand, 2007b).