Infometrics quarterly monitor shows broad-based recovery as all 16 regional economies expand

New Zealand economic activity rose 2.6 percent in the June 2026 quarter, with all 16 regional economies expanding, according to provisional estimates from Infometrics' Quarterly Economic Monitor. Over the year to June 2026, activity was up 1.7 percent.

The result marks a turning point after a sustained downturn. Infometrics principal economist Nick Brunsdon reported that Southland, Otago, Canterbury and Nelson-Tasman all grew above 2 percent over the year, with Waikato and the Bay of Plenty also recording strong growth. A robust primary sector and increased activity across most industries underpinned the quarterly result.

Infometrics attributed the brighter figures partly to base effects — the economy was weaker in the comparable period a year earlier — and to a less severe economic hit from the Iran War than initially feared.

The labour market presents a more mixed picture. Job numbers rose 0.4 percent in the June quarter, including a 0.3 percent lift in Auckland, following two years of decline. However, six regions saw job numbers fall, with the unemployment rate rising as demand for work outpaced a low volume of job advertisements.

Household spending remains delicate. Marketview data showed card spending rose just 0.6 percent in the year to June 2026. Once retail inflation is stripped out, Infometrics estimates spending volumes fell 1.5 percent over the same period. Residential construction intentions, by contrast, showed clear recovery: building consents lifted 19 percent to more than 40,000 over the 12 months to June, with provincial consents up 22 percent and metro consents up 20 percent, while rural consents fell 5.3 percent.

Tourism provided a bright spot. Commercial guest nights rose 3.6 percent over the June 2026 year, driven by a 9.1 percent lift in international guest nights; domestic guest nights rose just 0.6 percent.

The quarterly data lands against a shifting forecast backdrop. Infometrics' January 2026 outlook pegged GDP growth at 2.5 percent for the year, rising to 2.9 percent in early 2027. An April 2026 revision cut that to 1.3 percent per annum, reflecting weaker conditions. By July 2026, Infometrics had revised its trajectory again, expecting growth to reach 2.7 percent per annum by mid-2027 and averaging 2.3 percent over the following four years. The July forecasts noted that businesses were investing more despite ongoing challenges, with business confidence having lifted and the March 2026 quarter providing a stronger starting point.

The global picture is less accommodating. The World Bank's June 2026 Global Economic Prospects forecast global growth slowing to 2.5 percent in 2026, down from 2.9 percent in 2025, and downgraded forecasts for two-thirds of economies covered. The IMF revised its 2026 global growth forecast down by 0.2 percentage point relative to its January 2026 Update, leaving the 2027 forecast unchanged. Focus Economics' consensus forecast expects Iran's economy to contract 1.0 percent in 2026. Allianz Research's 2026-27 outlook, titled "The Fog of War," anticipated the Middle East conflict would deliver lower growth, higher inflation, stronger fiscal pressure and higher deficits for the US and Europe.

For political watchers, the Infometrics monitor provides the last comprehensive economic snapshot before the 2026 election campaign. The tension between broad-based output recovery and soft household spending, rising unemployment and election uncertainty is the one that will frame the economic debate. The government can point to growth across all regions and a construction sector turning the corner. The opposition has the counter: spending volumes are down, unemployment is rising, and the global environment is deteriorating.

What the July forecasts suggest is that Infometrics sees the economy finding a firmer footing, even if the pace of recovery is uneven and the external environment remains hostile. The trajectory has shifted three times in seven months, which itself signals how much uncertainty the forecasters are working through.