The main driver behind the GDP growth was construction, which rose 4.9 percent. This was the strongest quarterly growth for the industry since March 2014.
The increase in construction also reflected higher construction-related investment. Investment in other construction (infrastructure such as roading and telecommunications) was up 12 percent – the highest quarterly growth since June 2014. Investment in residential building rose 4.2 percent, driven by strong increases in Auckland and Waikato, but eased in Canterbury.
Rising demand saw service industries grow 0.8 percent this quarter. The health (+2.7 percent) and retail trade (+1.3 percent) industries led the overall increase.
Strong tourist arrivals also supported the growth in service industries, reflecting a 4.9 percent rise in tourist spending.
In contrast, mining industry shrank 3.3 percent, driven by lower oil and gas extraction and coal mining. Manufacturing was down 0.4 percent, due to decreased food, beverage, and tobacco production. Agriculture production decreased 0.1 percent, reflecting a fall in sheep and beef farming and partially offset by increased milk production.
The expenditure measure of GDP expanded 0.5 percent, following 0.8 percent growth in the December quarter. Household spending increased 0.4 percent (+1 percent in Q4), government expenditure (+0.5 percent from -0.3 percent in Q4) and investments (+2.4 percent from -2.2 percent in Q4) rebounded. Imports grew 0.2 percent while exports fell 1 percent, driven by dairy (-8.9 percent), meat (-13 percent) and coal, crude petroleum and ores, minerals and gases (-39 percent) sales.