New Zealand's gross domestic product expanded just 2.6 percent on year in the first quarter of 2015, Statistics New Zealand said on Thursday.
That was shy of forecasts for an increase of 3.1 percent and down from the 3.5 percent gain in the previous three months.
On a quarterly basis, GDP added just 0.2 percent - also well below forecasts for an increase of 0.6 percent. It was also down sharply from the downwardly revised 0.7 percent increase in the three months prior (originally 0.8 percent).
Among the main components, agriculture was down 2.3 percent, due to lower milk production, the bureau said. Mining was down 7.8 percent, due to decreased exploration activity, and oil and gas extraction.
The lower growth reflected a 2.9 percent fall in primary industries (agriculture, forestry, and mining) - the largest fall since September 2010. Despite lower quarterly growth, annual growth was still strong, at 3.2 percent.
"Oil and gas were big factors in the lower GDP growth this quarter," national accounts manager Gary Dunnet said. "There was less extraction and exploration, as international prices fell."
Agriculture decreased 2.3 percent in the March 2015 quarter. Lower milk production was behind the decrease, in a quarter that had drought conditions and lower dairy prices. Forestry production and exports of forestry products were also down.
A 2.4 percent increase in retail trade and accommodation helped to offset the decrease in primary industries. Retail trade and accommodation has had continued strong increases and now has its largest annual growth in almost a decade, at 6.1 percent.
Possible contributors this quarter include the 2015 Cricket World Cup and more visitors during Chinese New Year than in the past, the bureau noted. International tourist spending in New Zealand increased 2.3 percent this quarter, and there was an increase in arts and recreation (including sport, recreation, and gambling services), and international air travel.
It was a mixed picture for the rest of the economy this quarter. On the expenditure measure of GDP, household spending increased 0.7 percent, while investment fell 1.9 percent. An increase in construction investment was offset by large decreases in both machinery and equipment investment.
The size of the economy was NZ$239 billion for the year ended March 2015.
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