Stats NZ data reveals that gross domestic product (GDP), a broad indicator of economic growth, declined by 0.9% in the three months to June, marking a 1.1% decrease compared to the same period last year.
“GDP has now fallen in three of the last five quarters,” Stats NZ spokesperson Jason Attewell said.
The sectors that performed the weakest were manufacturing, which dropped 3.5%; primary industries, declining by 0.7%; and construction, falling 1.8%.
Transport, financial services, retail, and healthcare also experienced modest declines.
Some of the few positive contributors included increases in telecommunications and internet services, rental and real estate services, and public administration expenditure.
The country’s purchasing power, measured by disposable income, increased by 0.9% for the quarter.
Finance Minister Nicola Willis attributed the economy’s downturn to global turmoil and uncertainty caused by the United States’ tariff implementation.
She said the US announcement led businesses and households to delay spending decisions.
“The economy had been growing strongly in the previous six months but suddenly had the stuffing knocked out of it,” Willis said.
“I feel for people and businesses who have been affected.”
Willis also noted signs of renewed economic growth as interest rates declined.
“Lower interest rates are filtering through the economy,” she said.
“There is evidence of increased mortgage lending. And the impact of tariffs has not been as disruptive as initially feared. The outlook for most export sectors remains positive.
“All forecasters are expecting economic growth to strengthen from now on as uncertainty about the impact of increased tariffs eases.”