New Zealand's economic expansion is all about an increasing number of people coming to the country, and that is reflected in the latest gross domestic product (GDP) figures released yesterday.
Statistics NZ figures showed New Zealand's economy grew 0.7% in the three months ended March to give an annual growth rate of 2.8%.
Increasing population was the key driver.
BNZ senior economist Stephen Toplis said growth in visitor numbers was being reflected in retail spending and services exports.
Growth from retail spending and construction came from New Zealand's rapid, largely immigration-driven population growth.
There would be those who rightly pointed out per capita economic growth was low.
"Be that as it may, New Zealand has a growth rate the envy of many and the current pace of population growth should, in theory, support future economic expansion as well.''
It appeared per capita GDP growth did appear to be again trending higher, he said.
The sort of population growth New Zealand was experiencing continued to supply the labour needed to support the expansion and was keeping a cap on inflation, particularly wages.
House prices were a different matter.
House price inflation was largely due to a paucity of available stock in which people could live.
It was heartening to see a significant contributor to the quarter's 0.7% GDP increase was the 4.2% increase in residential building, a 7.7% increase on the previous corresponding period, Mr Toplis said.
"While further solid expansion is required, at least some dent is being made on the accommodation shortage the economy faces.''
The external sector proved to be a significant barrier to growth in the March quarter.
In particular, exports fell 1%.
That came of little surprise with the knowledge dairy, meat and oil export volumes were all under pressure in the quarter.
Partly it was a reflection of timing issues. Meat exports dropped 13.1% in the quarter.
The New Zealand economy continued to outperform most of the developed economies of the world, making it an attractive repository for everyone else's excessive cash, he said.
With the economy operating at or above trend rates of expansion, the argument for further interest rate cuts was becoming increasing hard to make.
But the extent of the interest rate differential in New Zealand's favour added to the attractiveness of New Zealand dollar investment.
Looking ahead, second-quarter GDP was expected to be about the same as in March, Mr Toplis said.
Formally, the BNZ was picking 0.6% for the quarter and 3.1% for the year.
Finance Minister Bill English said the broad-based growth demonstrated the increasingly diversified nature of the New Zealand economy.
Despite the dairy sector continuing to be under pressure, other sectors were performing well and contributing to an overall solid rate of economic growth.
Spending growth by overseas tourists was up 16.8% in the year to March, contributing to stronger exports which were up 5% over the year.
The growing economy was delivering benefits for New Zealand families, he said.
About 200,000 additional jobs had been created in the last three years and another 170,000 were expected by 2020.
The average income was now $11,000 higher than when National was elected in 2008.
However, Labour finance spokesman Grant Robertson said the figures revealed real gross national disposable income per person was zero for the last year and GDP per person rose just 0.5% - primarily thanks to record population growth.
"Right now, Kiwis are working extremely hard but they're playing catch-up. The economy simply isn't keeping up with population growth which has seen a net 70,000 people arriving in the country in the past year.''
At a glance
• Economy grows 0.7% in March and 2.8% annually.
• Increasing population the key driver.
• Tourism growth offsets meat and dairy weakness.
• NZ dollar rises ever higher.
