First impressions: NZ GDP, March Quarter 2026

The New Zealand economy made a solid start to the year with GDP rising by 0.8% in the March quarter. Revisions to recent history made this a stronger overall result than we were expecting.

Key results

• Quarterly change: +0.8% (last: +0.5%, revised from +0.2%)
  • Westpac f/c: +1.0%, market f/c: +0.8%, RBNZ: +1.0%
• Annual change: +1.5% (last: +1.5%, revised from +1.3%)

New Zealand’s GDP rose by a solid 0.8% in the first quarter of 2026. While that was a little less than we had forecast, the net impact of revisions to the recent history make this a stronger overall result than we were expecting.

First, growth in the December quarter was revised up to 0.5% from an initially reported 0.2%. The main reasons were updated information on building work and agricultural output.

Second, there has been some recalculation of the seasonal patterns in the data (an issue that we discussed in our preview and in earlier reports). The result is that March quarters receive less of an uplift than they did previously; without that change, the result would have been closer to our forecast of 1%.

The effects of these revisions are most clearly shown in the annual growth rate, which printed at 1.5% compared to our forecast of 1.2%, despite growth in the March quarter itself coming in lower than our estimate.

The main drivers in the March quarter were much as we expected, with strong gains in manufacturing, wholesale trade, retailing and professional services. Construction activity fell by 1%, but this was less than we expected – residential and non-residential building work fell, but there was a strong lift in non-building construction.

These results were slightly ahead of the RBNZ’s forecasts in its May Monetary Policy Statement (which were in line with our own). While that will carry some kind of weight in the policy committee’s discussions, the focus is more likely to be on the developments since March – what impact the spike in fuel prices has had on activity, what the subsequent pullback in oil prices will mean for the persistence of inflation pressures, and of course whether the peace agreement can reasonably be expected to hold. We’ll be reviewing our forecasts of activity, inflation and interest rates in the next week or so.