NZ Economy Surges Despite Iran War Headwinds

New Zealand's economic recovery continued to gain momentum in the June 2026 quarter, despite challenges from the ongoing Iran War. According to Infometrics' Quarterly Economic Monitor, regional economies expanded by 2.6% year-over-year (pa) and 1.7% over the past year.

The southern regions of Southland, Otago, Canterbury, and Nelson-Tasman led growth with rates exceeding 2% pa in the year to June 2026. Parts of the North Island, such as Waikato and Bay of Plenty, also saw growth.

Infometrics Principal Economist Nick Brunsdon noted that while economic activity may not have been as severely impacted by the Iran War as initially feared, the recovery is being driven by a combination of last year's weaker economy and reduced effects from the conflict. Strong primary sector activity remains a key driver, but growth has emerged across most industries.

However, job numbers lagged behind economic activity, with national employment rising 0.4% pa in the June 2026 quarter. This includes a 0.3% pa increase in Auckland, marking an end to two years of decline. Despite this, six regions still experienced job declines, and the unemployment rate has increased due to restrained jobs growth and low job ads not keeping pace with demand.