Finance Minister Bill English finally had something to smile about yesterday with confirmation the economy grew by 2.6% in the year ended June, the highest growth since 2007 - before the global financial crisis.
The second-quarter gross domestic product (GDP) economic growth came in stronger than market expectations at 0.6% to give the annual figure of 2.6%.
GDP records all economic activity in an economy over a set period.
Mr English said in the first six months of the year, the economy grew 1.6% which compared favourably with the rest of the developed world.
"New Zealand's economy continues to perform better than those of most other developed countries, despite uncertainties in Europe, the United States and suggestions that growth in China may have come off its recent highs."
In response to the GDP figures, the kiwi edged back towards US83c but Opposition MPs were strangely silent after being critical this week about the Government's lack of action in pushing the currency lower.
ASB economist Christina Leung said a large part of the result reflected the boost from post-earthquake rebuilding, with large increases in construction and core manufacturing output.
Added to that was continued strength in agriculture, forestry and fishing sector activity.
"Following on from the 1% increase in economic activity over the March quarter, today's result points to the recovery in the New Zealand economy gaining a firmer footing."
There was a large increase in heavy and civil construction activity, she said.
A large part of that was likely to reflect the rebuilding of infrastructure taking place in Canterbury.
Also, there was a continued increase in residential construction. ASB expected rebuilding to gain further momentum over the coming year in light of the increase in building consent issuance and surge in cement sales in Canterbury in recent months, Ms Leung said.
The result indicated the recovery in the New Zealand economy was gaining traction. A large part of it reflected the activity taking place in Canterbury.
The surge in infrastructure and residential construction should give the Reserve Bank confidence that rebuilding was on track.
"Recent activity indicators point to a further pick-up in rebuilding over the coming year and this should provide a continued boost to the New Zealand economy," she said.
Council of Trade Unions economist Bill Rosenberg agreed there were signs the Christchurch rebuilding was getting under way, particularly in housing, but job growth was not following.
Unemployment was expected to stay about 7% in the second half of 2012 and that would mean 167,000 people out of work.
"A much more proactive approach to job creation is needed," he said.
Household spending was subdued, rising only 0.2%, further evidence that many families, particularly those on lower incomes, were struggling to make ends meet, he said.
