New Zealand's economy experienced a 0.9% contraction in the second quarter of 2025, a shift from the notable 0.8% growth seen in the first quarter, which had been revised higher. This decline surpassed market predictions, which anticipated only a 0.2% downturn. Previously, the economy had enjoyed two consecutive quarters of growth following earlier contractions.
Dissecting the data by industry, the primary sector saw a 0.3% decrease, contrasting with a 0.5% increase in the previous quarter. Goods-producing industries faced a sharp decline of 3.5%, a significant drop from a 2.4% rise, mainly due to substantial falls in mining (-4.1% compared to a 1% increase previously) and manufacturing (-2.4% compared to a 0.1% rise). The services sector remained nearly stagnant, but there were specific areas of decline such as transport, postal, and warehousing (-0.6% compared to a 0.6% increase), healthcare and social assistance (-0.7% compared to a 1.7% increase), and financial and insurance services, which maintained a consistent decline of 0.5%.
Conversely, some sectors demonstrated growth: wholesale trade grew by 1.4%, a turnaround from a 0.4% dip; information media and telecommunications rose by 1.8% after an earlier 0.8% drop; and rental, hiring, and real estate services climbed by 0.7%, improving on a previous 0.3% rise. On a year-on-year basis, the GDP shrank by 0.6% in the second quarter, mirroring the contraction rate of the first quarter.
