Still growing: Strong construction boosts economy in second quarter

Higher fuel prices slowed the economy in the second quarter but didn’t stop it from growing.

New Zealand’s gross domestic product (GDP) rose 0.2% in the June 2026 quarter, following a 0.9% increase in the March 2026 quarter, according to figures released by Stats NZ today.

“The 0.2% growth in economic activity in the June 2026 quarter reflects mixed results, with increases in nine out of 16 industries,” general manager and macroeconomic spokesman Jason Attewell said in a statement.

The result was ahead of the Reserve Bank’s forecast of a flat (0%) quarter.

But bank economists had been picking growth of 0.1-0.3%.

The 0.2% growth shows the economy handled the Iran conflict and April’s oil price shock better than initially expected.

It translates to 1.7% average annual growth or 2.3% growth from the second quarter a year ago.

First-quarter growth was revised up from 0.8% to 0.9%.

Construction was the largest upward contributor to the overall increase in GDP, up 2.7% in the quarter.

This was the largest increase in construction activity since the June 2023 quarter.

“An increase in residential building activity contributed to the overall growth in the construction industry in the June 2026 quarter,” Attewell said.

Public administration and safety also contributed to the increase in GDP in the June 2026 quarter, up 2.0%.

The largest downward contributors to GDP in the June 2026 quarter were transport, postal and warehousing (down 1.7%), and retail trade and accommodation (down 1.0%).

GDP per capita rose 0.1% during the June 2026 quarter.

Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.