New Zealand enjoys GDP bump of 0.8 per cent in Q1
New Zealand's economy is rebounding towards better health, posting 0.8 per cent GDP growth in the first three months of the year.
However, the Kiwi economy is still 1.1 per cent smaller than it was a year ago, such was the damage from a 2024 recession, with warnings of dire times and tough choices ahead.
On Thursday, Stats NZ revealed growth figures for Q1 2025, which improved on predictions from the Reserve Bank (RBNZ)of an 0.4 per cent uptick.
"Nine of the 16 industries increased, with the largest rises in business services and manufacturing," spokesperson Katrina Dewbery said.
The quarterly jump is the best result in almost two years, with GDP per capita was also up in the March quarter, growing by 0.5 per cent.
Acting prime minister David Seymour called the result "a tribute to New Zealanders" and Finance Minister Nicola Willis described it as "great news".
"Hard working people have knuckled down through a very challenging period and today's figure summarises that," Mr Seymour said.
While politicians were pleased at the result, there's little doubt New Zealand is in a tough spot economically.
Two particularly troubled industries - mining and construction - posted growth of 1.0 and 0.5 per cent in the quarter, but are down 11.2 and 9.3 per cent over the last year.
BNZ senior economist Doug Steel said more recent data on services (two-thirds of the Kiwi economy) and manufacturing looked "nothing short of disastrous".
"There are clear warnings that the New Zealand economy has hit a brick wall in Q2 and this is despite the substantial revenue growth flowing from the agricultural sector," he wrote.
"Many businesses noted reduced demand and falling revenues due to rising costs, economic uncertainty and low consumer confidence."
Mr Steel said it made a clear argument for further stimulus from the country's central bank, which has already eased the official cash rate from 5.5 per cent last August to the current position of 3.25 per cent.
However, other banks point to the above-expectations headline GDP data as a reason to hold fire at the bank's meeting next month.
"We think the RBNZ will pause in July. Beyond that, it's a tightrope walk of what seems to be stagflationary risks. We do not envy the hand our friends (at the RBNZ) have been dealt," ASB Chief Economist Nick Tuffley said.
Council of Trade Unions chief economist Craig Rennie said the GDP figures showed the government's failure to spark the economy.
The right-leaning coalition, led by Chris Luxon, took office in November 2023 and has reined in public spending at a time when many, including the CTU, argued for a fiscal boost.
"The economy is still smaller than at the election in real terms. With more recent data suggesting that the economy is struggling to grow, there is a real danger that we return to slow, no, or negative growth," Mr Rennie said.
"There are 23,000 more people on Jobseekers (benefit) this year. 48 per cent of workers in New Zealand got a pay cut in real terms. Business and consumer confidence are at levels associated with recessions.
"One quarter of data shouldn't blind the government of the need for change."
New Zealand's Q1 bump is healthy compared to Australia's 0.2 per cent increase in the same three months - though New Zealand's 1.1 per cent contraction over the last 12 months is well short of Australia's 1.3 per cent growth.
New Zealand's economy is rebounding towards better health, posting 0.8 per cent GDP growth in the first three months of the year.
However, the Kiwi economy is still 1.1 per cent smaller than it was a year ago, such was the damage from a 2024 recession, with warnings of dire times and tough choices ahead.
On Thursday, Stats NZ revealed growth figures for Q1 2025, which improved on predictions from the Reserve Bank (RBNZ)of an 0.4 per cent uptick.
"Nine of the 16 industries increased, with the largest rises in business services and manufacturing," spokesperson Katrina Dewbery said.
The quarterly jump is the best result in almost two years, with GDP per capita was also up in the March quarter, growing by 0.5 per cent.
Acting prime minister David Seymour called the result "a tribute to New Zealanders" and Finance Minister Nicola Willis described it as "great news".
"Hard working people have knuckled down through a very challenging period and today's figure summarises that," Mr Seymour said.
While politicians were pleased at the result, there's little doubt New Zealand is in a tough spot economically.
Two particularly troubled industries - mining and construction - posted growth of 1.0 and 0.5 per cent in the quarter, but are down 11.2 and 9.3 per cent over the last year.
BNZ senior economist Doug Steel said more recent data on services (two-thirds of the Kiwi economy) and manufacturing looked "nothing short of disastrous".
"There are clear warnings that the New Zealand economy has hit a brick wall in Q2 and this is despite the substantial revenue growth flowing from the agricultural sector," he wrote.
"Many businesses noted reduced demand and falling revenues due to rising costs, economic uncertainty and low consumer confidence."
Mr Steel said it made a clear argument for further stimulus from the country's central bank, which has already eased the official cash rate from 5.5 per cent last August to the current position of 3.25 per cent.
However, other banks point to the above-expectations headline GDP data as a reason to hold fire at the bank's meeting next month.
"We think the RBNZ will pause in July. Beyond that, it's a tightrope walk of what seems to be stagflationary risks. We do not envy the hand our friends (at the RBNZ) have been dealt," ASB Chief Economist Nick Tuffley said.
Council of Trade Unions chief economist Craig Rennie said the GDP figures showed the government's failure to spark the economy.
The right-leaning coalition, led by Chris Luxon, took office in November 2023 and has reined in public spending at a time when many, including the CTU, argued for a fiscal boost.
"The economy is still smaller than at the election in real terms. With more recent data suggesting that the economy is struggling to grow, there is a real danger that we return to slow, no, or negative growth," Mr Rennie said.
"There are 23,000 more people on Jobseekers (benefit) this year. 48 per cent of workers in New Zealand got a pay cut in real terms. Business and consumer confidence are at levels associated with recessions.
"One quarter of data shouldn't blind the government of the need for change."
New Zealand's Q1 bump is healthy compared to Australia's 0.2 per cent increase in the same three months - though New Zealand's 1.1 per cent contraction over the last 12 months is well short of Australia's 1.3 per cent growth.
New Zealand's economy is rebounding towards better health, posting 0.8 per cent GDP growth in the first three months of the year.
However, the Kiwi economy is still 1.1 per cent smaller than it was a year ago, such was the damage from a 2024 recession, with warnings of dire times and tough choices ahead.
On Thursday, Stats NZ revealed growth figures for Q1 2025, which improved on predictions from the Reserve Bank (RBNZ)of an 0.4 per cent uptick.
"Nine of the 16 industries increased, with the largest rises in business services and manufacturing," spokesperson Katrina Dewbery said.
The quarterly jump is the best result in almost two years, with GDP per capita was also up in the March quarter, growing by 0.5 per cent.
Acting prime minister David Seymour called the result "a tribute to New Zealanders" and Finance Minister Nicola Willis described it as "great news".
"Hard working people have knuckled down through a very challenging period and today's figure summarises that," Mr Seymour said.
While politicians were pleased at the result, there's little doubt New Zealand is in a tough spot economically.
Two particularly troubled industries - mining and construction - posted growth of 1.0 and 0.5 per cent in the quarter, but are down 11.2 and 9.3 per cent over the last year.
BNZ senior economist Doug Steel said more recent data on services (two-thirds of the Kiwi economy) and manufacturing looked "nothing short of disastrous".
"There are clear warnings that the New Zealand economy has hit a brick wall in Q2 and this is despite the substantial revenue growth flowing from the agricultural sector," he wrote.
"Many businesses noted reduced demand and falling revenues due to rising costs, economic uncertainty and low consumer confidence."
Mr Steel said it made a clear argument for further stimulus from the country's central bank, which has already eased the official cash rate from 5.5 per cent last August to the current position of 3.25 per cent.
However, other banks point to the above-expectations headline GDP data as a reason to hold fire at the bank's meeting next month.
"We think the RBNZ will pause in July. Beyond that, it's a tightrope walk of what seems to be stagflationary risks. We do not envy the hand our friends (at the RBNZ) have been dealt," ASB Chief Economist Nick Tuffley said.
Council of Trade Unions chief economist Craig Rennie said the GDP figures showed the government's failure to spark the economy.
The right-leaning coalition, led by Chris Luxon, took office in November 2023 and has reined in public spending at a time when many, including the CTU, argued for a fiscal boost.
"The economy is still smaller than at the election in real terms. With more recent data suggesting that the economy is struggling to grow, there is a real danger that we return to slow, no, or negative growth," Mr Rennie said.
"There are 23,000 more people on Jobseekers (benefit) this year. 48 per cent of workers in New Zealand got a pay cut in real terms. Business and consumer confidence are at levels associated with recessions.
"One quarter of data shouldn't blind the government of the need for change."
New Zealand's Q1 bump is healthy compared to Australia's 0.2 per cent increase in the same three months - though New Zealand's 1.1 per cent contraction over the last 12 months is well short of Australia's 1.3 per cent growth.
New Zealand's economy is rebounding towards better health, posting 0.8 per cent GDP growth in the first three months of the year.
However, the Kiwi economy is still 1.1 per cent smaller than it was a year ago, such was the damage from a 2024 recession, with warnings of dire times and tough choices ahead.
On Thursday, Stats NZ revealed growth figures for Q1 2025, which improved on predictions from the Reserve Bank (RBNZ)of an 0.4 per cent uptick.
"Nine of the 16 industries increased, with the largest rises in business services and manufacturing," spokesperson Katrina Dewbery said.
The quarterly jump is the best result in almost two years, with GDP per capita was also up in the March quarter, growing by 0.5 per cent.
Acting prime minister David Seymour called the result "a tribute to New Zealanders" and Finance Minister Nicola Willis described it as "great news".
"Hard working people have knuckled down through a very challenging period and today's figure summarises that," Mr Seymour said.
While politicians were pleased at the result, there's little doubt New Zealand is in a tough spot economically.
Two particularly troubled industries - mining and construction - posted growth of 1.0 and 0.5 per cent in the quarter, but are down 11.2 and 9.3 per cent over the last year.
BNZ senior economist Doug Steel said more recent data on services (two-thirds of the Kiwi economy) and manufacturing looked "nothing short of disastrous".
"There are clear warnings that the New Zealand economy has hit a brick wall in Q2 and this is despite the substantial revenue growth flowing from the agricultural sector," he wrote.
"Many businesses noted reduced demand and falling revenues due to rising costs, economic uncertainty and low consumer confidence."
Mr Steel said it made a clear argument for further stimulus from the country's central bank, which has already eased the official cash rate from 5.5 per cent last August to the current position of 3.25 per cent.
However, other banks point to the above-expectations headline GDP data as a reason to hold fire at the bank's meeting next month.
"We think the RBNZ will pause in July. Beyond that, it's a tightrope walk of what seems to be stagflationary risks. We do not envy the hand our friends (at the RBNZ) have been dealt," ASB Chief Economist Nick Tuffley said.
Council of Trade Unions chief economist Craig Rennie said the GDP figures showed the government's failure to spark the economy.
The right-leaning coalition, led by Chris Luxon, took office in November 2023 and has reined in public spending at a time when many, including the CTU, argued for a fiscal boost.
"The economy is still smaller than at the election in real terms. With more recent data suggesting that the economy is struggling to grow, there is a real danger that we return to slow, no, or negative growth," Mr Rennie said.
"There are 23,000 more people on Jobseekers (benefit) this year. 48 per cent of workers in New Zealand got a pay cut in real terms. Business and consumer confidence are at levels associated with recessions.
"One quarter of data shouldn't blind the government of the need for change."
New Zealand's Q1 bump is healthy compared to Australia's 0.2 per cent increase in the same three months - though New Zealand's 1.1 per cent contraction over the last 12 months is well short of Australia's 1.3 per cent growth.
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A surprise fall in jobs will do little to further improve the prospects of a Reserve Bank rate cut as the central bank weighs up the impact of a tight labour market. Australia's unemployment rate held steady at 4.1 per cent in May, but 2500 jobs dropped out of the economy, the Australian Bureau of Statistics reported on Thursday. Despite the result confounding forecasts of a 21,200 gain in employment, economists don't expect the RBA to read too much into it as it followed a jump of 87,600 jobs in April. The fall in employment suggested some "payback" in the labour market, IG market analyst Tony Sycamore said. Employment was still up by 2.3 per cent since May 2024, a rise bigger than the pre-pandemic, 10-year average annual growth rate of 1.7 per cent, bureau head of labour statistics Sean Crick said. "This fall in employment, combined with a drop in unemployment of 3000 people, meant that the unemployment rate remained steady at 4.1 per cent for May," he said. The volatility in employment figures has not been reflected in the jobless rate, which has held within a tight 3.9 to 4.4 per cent range since March 2024. The participation rate fell 0.1 per cent to 67 per cent. "Together, today's numbers imply the labour market is continuing to gradually cool," Mr Sycamore said. The Reserve Bank watches the labour market closely as it is a key influence on inflation. Mr Sycamore expects the RBA to lower interest rates by 25 basis points at its next board meeting in July, but the rates market marginally reduced the odds of a July cut to 63 per cent following the latest release. ANZ economists Aaron Luk and Adam Boyton said the labour market was tracking healthier in the June quarter than the RBA expected in its May forecast. But they expect the central bank to ignore some of the noise of the fluctuating employment growth figures. "The unemployment rate has averaged 4.07 per cent over the June quarter so far versus the RBA's forecast of 4.2 per cent," they said, while employment growth was also tracking higher than forecasts. "These aren't large differences, but they do show a better near-term labour market picture than the RBA's starting point in the May Statement on Monetary Policy. "That said, we suspect these data won't sway the market or analysts one way or another on the July RBA board meeting." Treasurer Jim Chalmers said low unemployment was one of the best defences against uncertainty in the global economy. "While other countries have sacrificed much higher unemployment for progress on inflation, Australia has been able to preserve the gains we've made in our labour market at the same time as we've got inflation down and jobs up," he said. Meanwhile, population growth slowed to 0.1 percentage points to 91,133 in the final three months of 2024, as net overseas migration dropped by a fifth. Alongside the slowdown in immigration, a recent recovery in dwelling approvals meant the pace of new housing entering the market was finally on track to meet growth in underlying demand, AMP economist My Bui said. Australia's population was just over 27.4 million people at the end of 2024, the bureau said. Queensland and Western Australia were the only jurisdictions to experience positive net interstate migration, while NSW was the biggest loser. More than 28,000 people abandoned the nation's first state for cheaper housing markets.
