New Zealand is officially in a recession as gross domestic product (GDP) fell 0.1% in the first quarter.
This included the initial impacts of Auckland Anniversary floods and Gabrielle Gabrielle which contributed to falls in horticulture and transport support services.
It includes estimates of hundreds of millions of dollars of lost production and activity across agriculture, forestry, fishing, transport and manufacturing due to the extensive flooding.
The March 2023 quarter followed a 0.7% fall in the December 2022 quarter, according to figures released by Stats NZ.
The December 2022 and March 2023 quarter declines follow growth in the June and September 2022 quarters.
There were a range of results at industry level in the March 2023 quarter, with just over half of industries declining in the period.
Business services was the biggest downwards driver, down 3.5%. This was partly offset by a 2.7% increase in information media and telecommunications in the quarter.
“Management consulting, advertising, scientific, and engineering design services drove the fall in business services,” Stats NZ economic and environmental insights general manager Jason Attewell says.
Finance minister Grant Robertson acknowledges New Zealand has entered a recession but says it’s a technical one “by the barest of margins”.
“Ongoing strength in other parts of the economy helped mitigate the impact, with GDP being 2.9% higher than it was a year ago.
“Looking ahead, export growth, the tourism rebound, returning international students, migration inflows and investment in the recovery mean the economy is well-positioned to handle challenging times,” Robertson says.
