New Zealand's economic outlook is looking brighter, despite the ongoing conflict in the Middle East, rising unemployment and uncertainty ahead of the general election.Provisional estimates from the Infometrics June 2026 Quarterly Economic Monitor suggests economic activity rose 2.6 percent in the June 2026 quarter, and was up 1.7 percent over the year earlier."All 16 regional economies expanded in the June 2026 quarter," Infometrics principal economist Nick Brunsdon said."Growth continues to be led from the south, with Southland, Otago, Canterbury and Nelson-Tasman all growing at over 2 percent in the year to June 2026. Parts of the North Island are joining in too, with strong growth seen in both Waikato and the Bay of Plenty."While employment growth lagged behind other economic activity, job numbers rose 0.4 percent in the June 2026 quarter, including a 0.3 percent lift in Auckland, following a decline over the past two years.However, six regions still saw the number of jobs fall in the second quarter, with an increase in the unemployment rate and demand for work outpacing a low number of job ads.Infometrics principal economist Nick Brunsdon.Supplied / Infometrics"Despite the clear economic headwinds from conflict in the Middle East, economic activity might not have been as badly hit as first feared," he said."The more upbeat result is due to a combination of the weaker economy last year, and less of an intense hit to the economy - so far - from the Iran War."Brunsdon said a strong primary sector and increased activity across most industries this quarter was another positive."That said, we remain concerned about the pace of recovery over the rest of 2026 amid continued global uncertainty."He said household spending remained delicate, with Marketview date indicating card spending rose just 0.6 percent in the year to June 2026.Infometrics estimates that spending volumes fell 1.5 percent over the past year, once retail inflation was accounted for, higher prices for fuel reduced the real level of spending activity.Still, there were other positives."Tourism activity continues to expand, with a 3.6 percent lift in commercial guest nights recorded over the June 2026 year," Brunsdon noted."A 9.1 percent lift in international guest nights drove this result, as international tourism's recovery rolls on, even as domestic guest nights rose a sluggish 0.6 percent as higher fuel prices restrained Kiwi holidays across the country."Residential construction intentions also showed recovery with a 19 percent lift to more than 40,000 building consents over the 12 months to June.Provincial areas contributed the most to the increase, with consents up 22 percent, closely followed by a 20 percent lift in consents in metro areas. However, building consents in rural areas fell 5.3 percent, in line with an adjustment to shifts in population trends.