NZ GDP Revised Higher as March Quarter Growth Hits 0.8%

The New Zealand economy grew 0.8% in the March quarter, a solid start to the year that looked stronger once revisions to prior data were factored in.

December quarter growth was revised up to 0.5% from an initial 0.2%, driven by updated information on building work and agricultural output. A recalculation of seasonal patterns also reduced the typical March-quarter uplift; without that adjustment, the print would have been closer to the 1% forecast.

The annual growth rate came in at 1.5%, above the 1.2% forecast, even though the March quarter itself undershot expectations.

Manufacturing, wholesale trade, retailing and professional services led the gains. Construction fell 1%, less than expected, as a drop in residential and non-residential building was partly offset by a strong lift in non-building construction.

The results were slightly ahead of the RBNZ's May Monetary Policy Statement forecasts. The committee's focus now shifts to post-March developments: the impact of the fuel price spike on activity, what the subsequent pullback in oil means for inflation persistence, and whether the peace agreement holds. The bank is due to review its forecasts in the coming weeks.