Gross domestic product (GDP) rose 0.5 percent in the March 2017 quarter, following an increase of 0.4 percent in the December 2016 quarter, Stats NZ said today.

"Much lower building activity combined with mixed results for the service sector took the shine off higher dairy production and saw a second quarter of moderate overall GDP growth," national accounts senior manager Gary Dunnet said.

"At an industry level, 11 out of 16 industries increased this quarter, with agriculture and retail trade having the biggest increases, while construction was significantly down."

Agriculture grew 4.3 percent due to higher milk production. This flowed through to higher dairy product manufacturing, which contributed to the overall rise in food, beverage, and tobacco product manufacturing. Dairy exports fell 11 percent in the March 2017 quarter, resulting in a build-up in dairy inventories.