New Zealand’s economic recovery is building momentum, with higher activity in all but one region in the December 2025 quarter.
Provisional estimates from the Infometrics December 2025 Quarterly Economic Monitor suggested that economic activity rose 1.6 percent pa in the December 2025 quarter, and up 0.4 percent pa over the 2025 calendar year.
“The December 2025 quarter showed meaningful economic recovery across regions, including in the North Island which previously lagged in its economic recovery” said Infometrics Principal Economist Nick Brunsdon.
“Bay of Plenty and Waikato regions are now growing faster than the national average, and like the South Island regions, are buoyed by better primary sector returns. Auckland continues to lag, with activity up 1.3 percent pa in the December quarter, but it’s not too far behind the national average of 1.6 percent pa.”
Brunsdon said that the primary sector remained a bright spot, driving economic recovery for regional New Zealand.
The dairy pay-out has recently improved and is tracking just below last year’s record high, and milk solid production has increased 2.6 percent pa.
Prices are strong across the primary sector, with the value of New Zealand’s beef exports rising 21 percent pa over the 2025 calendar year, and horticulture exports lifting 28 percent pa.
The December 2025 quarter saw increases in manufacturing sentiment, concrete volumes and construction intentions, tourism arrivals, job ads, and more, but retail spending trends were mixed, inflationary pressures ramped up, and hours worked pulled back a touch.
With the job market remains challenging, households continue to scrimp with their money.
Infometrics estimates that consumer spending volumes fell 1.7 percent pa fell over the 2025 calendar year.
The housing market has started to pick up, with a 11 percent increase in sales over the year to December 2025, but it remains a buyers’ market, with prices falling 0.9 percent pa in the December 2025 quarter according to Infometrics analysis of Cotality data.
Employment gains remain more muted than economic activity, with only three South Island regions experiencing employment growth this quarter. Employment in Canterbury and Southland rose 0.6 percent pa, and 0.5 percent pa in Otago.
Metro areas, particularly in the north, continue to face employment declines, with Auckland employment down 0.9 percent pa and Wellington employment down 1.5 percent pa.
“Job momentum is still taking some time to turn around, and the unemployment rate has increased further, too. We expect employment will be one of the last indicators to recover.”
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