Economists expected GDP data - due at 10.45 today - to show the economy contracted in the fourth quarter of 2022, widely describing the slump as “payback” for the big bounce in the third quarter.

The economy contracted 0.6 per cent in the December quarter, a bigger fall than expected, data from StatsNZ showed.

Nine of 16 industries experienced a decrease in activity compared with the September 2022 quarter.

Manufacturing was the biggest driver of the decrease, down 1.9 per cent.

“A fall in transport equipment, machinery, and equipment manufacturing corresponded to lower investment in plant, machinery, and equipment, while reduced output in food, beverage, and tobacco manufacturing was reflected in a drop in dairy and meat exports,” Ruvani Ratnayake of Stats NZ said.

ASB was forecasting a 0.5 per cent slump, saying an element of payback was likely following the “whopper” 2 per cent lift in the third quarter.

Household spending was flat, as decreased spending on durables, including audio visual equipment and furnishings, was offset by increased household spending on services.

The quarterly figure was substantially worse than many major bank economists anticipated.

“GDP data is hugely backwards-looking at the best of times, but that’s doubly the case this time around given the impact of Auckland flooding and then Cyclone Gabrielle in January and February,” ASB senior economist Nathaniel Keall said earlier.

“Still, the print should provide a signal on the momentum (or lack thereof) the economy maintained heading into this year’s force majeure shocks.”

The release comes as the world braces for further fallout from the banking crisis in the US and Europe.

Both ANZ and KiwiBank have pencilled in a 0.3 per cent contraction for the quarter.

ANZ senior economist Miles Workman agreed that weak data was likely an exaggerated “payback” for the large rebound in the third quarter.

“But the economy is slowing – just perhaps not at the pace quarterly GDP growth in [the fourth quarter] may suggest.”

KiwiBank economists set the quarterly contraction into context across the entire second half of 2022.

“It’s largely payback from the surprisingly strong 2 per cent growth in Q3. But even with a weak print, growth over the second half was impressively strong,” said chief economist Jarrod Kerr.

“At 1.2 per cent, that’s well above the pre-Covid quarterly average of 0.7 per cent.”

Key measures of economic activity slowed into year-end, KiwiBank said.

“From building work to manufacturing sales and retail trade, the data point to weak activity.”