New Zealand’s economic turnaround continues, slowly but surely.
Although different parts of the economy are moving at vastly different paces, according to Infometrics’ latest monitoring of regional economies, overall economic activity is starting to grow at low levels across most regions.
Provisional estimates from the Infometrics June 2025 Quarterly Economic Monitor show underlying quarterly economic activity rose 0.6 percent pa in the June 2025 quarter, but remains down 0.8 percent on average over the 12 months to June 2025 compared to a year earlier.
“The June 2025 quarter marks the start of New Zealand’s economic recovery, with economic activity higher than a year ago across nearly all regions, albeit by a slim margin, and edging up from much weaker conditions last year”, said Infometrics Principal Economist Nick Brunsdon.
“Rural areas are driving our growth while the cities lag. Quarterly economic activity in rural areas is up 1.7 percent pa, buoyed by the primary sector. Quarterly metro area economic activity is up just 0.5 percent pa, held back by weak construction, professional services, and public sector activity.”
Brunsdon added that returns for the primary sector remain solid, helping rural areas to lead the economic recovery. The dairy pay-out is forecast to be similar to last season’s record high of NZD 10/kgMS. Meat, horticulture, and seafood prices are holding up at solid levels, too, all of which will add to eventual higher spending and investment locally.
With the primary sector leading recovery, the South is the brightest spot, with nearly every South Island region growing faster than the national average.
“Otago is a standout, with a two percent pa lift in economic activity this quarter, driven by primary sector gains and still-strong tourism activity. In the North, growth is concentrated in Waikato and Bay of Plenty, both up by over one percent pa, but other areas are taking longer to regain momentum.”
Job losses continue to be felt across New Zealand, with employment falling 1.7 percent pa in the June 2025 quarter. The main centres continue to bear the brunt of job losses, with employment falling 3.1 percent pa in the Wellington Region and 2.1 percent pa in Auckland.
“In our largest city, jobs are down 18,000 from where they were a year ago. In contrast, Southland was the only region to record employment growth, with a gain of 0.2 percent pa in the June 2025 quarter.”
Further worsening of the unemployment rate, and no evidence yet of job ads recovering, is limiting the recovery for households.
“The challenges faced by households are plain to see, with consumer spending falling 1.3 percent pa in the June 2025 quarter according to Marketview card spending data. Still challenging job conditions mean that, even as households refix onto lower mortgage rates, they remain cautious about how they spend."
More local FMCG news here
