Our take on the latest Gross domestic product (Fri 22 Mar 2019)
NZ economy grew 2.3%pa in December 2018
Gross fixed capital formation growth slowed to 1.2%pa
Private consumption growth improved to 3.5%pa
The key numbers...
- There was nothing standout in December’s GDP figures, reinforcing our view that the economy is following a predictable maturing, which will see growth slow but not fall off a cliff.
- Business investment is still poor, particularly given that interest rates remain low, and higher wages are expected – both factors that should see firms investing more in capital. This lack of investment is increasingly concerning given the constraint it could place on future economic growth.
- Household spending growth is surprisingly upbeat, suggesting that the slowdown in spending this year could be relatively moderate. However, recently lower consumer confidence presents a risk to continued consumption growth.
- Government spending is still soft, although we expect more growth to eventuate later in 2019 and in 2020 as projects finally get underway given the change in government and reprioritisation of spending initiatives.
National economic growth
Production based
...and our reaction
- Quarterly GDP growth was 0.6% (seasonally adjusted), in line with market expectations.
- Growth in non-construction capital investment continued to slow, with growth of 0.4%pa in the December quarter down from 9.6%pa as recently as March 2018. “Other” construction declined 7.3%, but residential and non-residential construction growth improved to 3.1%pa and 5.5%pa respectively.
- Household spending growth expanded in December, up 3.5%pa as consumers keep their wallets open. Growth in durables consumption (3.2%pa) and discretionary items like clothing and footwear (up 6.9%pa) and recreation and culture (up 5.4%pa) highlight a sustained willingness to spend.
- Government spending growth recovered in December, up 2.1%pa, although central government spending growth of 1.9%pa looks slower than expected given the spending commitments the government has announced.
Latest updates
Premium
Gross domestic product
NZ economy picking up before fuel price spike
Thu 18 Jun 2026
Quarterly
0.8% GDP in Mar 2026 qtr (sa)2.5% Business investment from Dec 2025 qtr (sa)
0.5% Household spending from Dec 2025 qtr (sa)Premium
Gross domestic product
No momentum in recovery, even before Iran
Thu 19 Mar 2026
Quarterly
0.1% GDP from Sep 2025 qtr (sa)0.1% Household spending from Sep 2025 qtr (sa)3.2% Private investment from Sep 2025 qtr (sa)Gross domestic product
Economy bounces back 1.1% from June’s dip
Thu 18 Dec 2025
Quarterly
1.1% rise in GDP in September quarter from JuneInvestment spending up 3.2% from June 2025Manufacturing activity up 2.2% from June 2025Gross domestic product
Economy contracts 0.9% as international uncertainty bites
Thu 18 Sept 2025
Quarterly
0.9% fall in GDP in June quarterHousehold spending up 0.4% from Mar 2025Manufacturing activity declines 3.5% from Mar 2025