The 0.2% growth shows the economy handled the Iran conflict and April\u2019s oil price shock better than initially expected.<\/p>\n
\u201cIt may take time for the full impacts of the closure of the Strait of Hormuz to wash through the economy,\u201d ASB economist Wesley Tanuvasa said.<\/p>\n
\u201cNonetheless, it does look like New Zealand has a stronger chin against this oil supply shock haymaker.\u201d<\/p>\n
This would help calm nerves from the RBNZ on the economic outlook, he said.<\/p>\n
The quarterly growth translated to 1.7% average annual growth or 2.3% growth from the second quarter a year ago.<\/p>\n
First-quarter growth was revised up from 0.8% to 0.9%.<\/p>\n
Construction was the largest upward contributor to the overall increase in GDP, up 2.7% in the quarter.<\/p>\n
This was the largest increase in construction activity since the June 2023 quarter.<\/p>\n
\u201cAn increase in residential building activity contributed to the overall growth in the construction industry in the June 2026 quarter,\u201d Attewell said.<\/p>\n
Public administration and safety also contributed to the increase in GDP in the June 2026 quarter, up 2.0%.<\/p>\n
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%).<\/p>\n
GDP per capita rose 0.1% during the June 2026 quarter.<\/p>\n
\u201cOverall, the big picture is that the New Zealand economy is in slightly better shape than the RBNZ had thought,\u201d Abhijit Surya, at Capital Economics said.<\/p>\n
\u201cThe upside surprise leaves the door open for the RBNZ to deliver a third consecutive rate hike at its October meeting,\u201d he said.<\/p>\n
Westpac senior economist Michael Gordon noted that a few sectors had taken the brunt of the fuel price shock since March.<\/p>\n
\u201cAs expected, the largest growth contribution came from construction,\u201d he said.<\/p>\n
\u201cThere were also solid contributions from manufacturing, wholesaling, and information and telecommunications.\u201d<\/p>\n
\u201cThe main declines were in transport and hospitality, which likely reflects the impact of the surge in fuel prices \u2013 households have tightened their belts by cutting back on travel in particular.\u201d<\/p>\n
Kiwibank economist Elliot Lowe noted weakness in the consumer end of the economy.<\/p>\n
\u201cWeakness was evident in discretionary spending, likely a reflection of Kiwi shoppers tightening their purse strings after fuel price pain,\u201d he said.<\/p>\n
\u201cArts and recreation as well as retail and accommodation both weighed negatively on economic growth.\u201d<\/p>\n
Lower than expected growth in the primary sector was a surprise, he said.<\/p>\n
Agriculture, forestry and fishing production declined by 0.3% over the quarter.<\/p>\n
The primary industry group shrank while goods producing and services both grew.<\/p>\n
\u201cWhile this is a good result in the context of the oil crisis that has rocked the world over the past few months, New Zealand\u2019s economy still had the smallest growth out of the nine other countries and country groups Stats NZ compared us to,\u201d he said.<\/p>\n
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.<\/p>\n