New Zealand's gross domestic product (GDP) grew by 0.6 per cent in the December quarter and by 2.8 per cent over the year, Stats NZ said.

The quarterly result was in line with market expectations but below the Reserve Bank's latest forecast of a 0.8 per cent gain.

The department said growth in the quarter was led by a 0.9 per cent rise in service industries, while the goods-producing industries grew 0.2 per cent.

"Today's GDP figures confirm that the economy lost some momentum over the second half of last year, but not to the extent that we thought," Westpac senior economist Michael Gordon said.


"That gives us a bit more comfort about our view that the growth momentum will pick up again this year, supported by government spending, construction, and rising household incomes," he said in a commentary.

Stats NZ's national accounts senior manager Gary Dunnet said growth was mixed at the industry level, with 10 of the 16 industries recording increases.

Retail and accommodation led the service industries with a 2.5 per cent rise, driven mainly by food and beverage services.

This was reflected in higher household spending on restaurants and hotels.

Overall, the quarterly growth in retail and accommodation was the largest seen since the 2011 Rugby World Cup.

Transport, postal, and warehousing (up 3.2 per cent) was another notable contributor, as was rental, hiring, and real estate (up 1.1 per cent).

Construction (up 1.8 per cent) was the only goods-producing industry to record an increase, with its first large rise in over a year. Both residential and non-residential construction contributed significantly to the increase, with infrastructure construction steady.

Primary industries struggled across the board – agriculture, forestry, and fishing fell on the back of stronger results in previous quarters.


GDP per capita was up 0.1 per cent in the December 2018 quarter, following a 0.1 per cent fall in the September 2018 quarter, the department said.

The size of the economy in current prices was $293 billion.