Tourism and manufacturing are driving New Zealand's economic growth but calls came yesterday for the stronger growth to be shared with those who need it most.
If not for tourism, New Zealand would be in a vulnerable position as the country heads into a dairy downturn.
Economic growth, as measured by gross domestic product (GDP), rose 0.9% in the three months ended September - in line with Westpac's forecasts and ahead of the Treasury's forecast of 0.6%.
Annual economic growth was 2.3% since September last year and average annual growth was 2.9%.
Statistics New Zealand figures showed growth was led by manufacturing, which grew by 2.8% over the last three months - the biggest increase since 2010.
Higher visitor numbers also boosted tourism exports and retail, trade and accommodation services, which were up 1.6% in the quarter.
In total, the services sector, which made up 70% of the economy, rose 0.9%.
Finance Minister Bill English said the economic growth in recent months confirmed the Government's programme of economic management was on track to deliver more jobs and ongoing wage rises for New Zealanders.
However, Council of Trade Unions economist Bill Rosenberg said the strong economic growth was not matched by growth in employment as there were more people not in work.
"While stronger growth is welcome, it needs to be shared with the people who need it most.''
The Treasury and Reserve Bank forecasts were for an increasing number of Kiwis to be out of work, he said.
The Government had a responsibility to ensure unemployment did not reach the level of 164,000 people forecast by the Treasury to happen in three months' time.
Growth in the economy was still "relatively weak'' per person in New Zealand because of the relatively rapid growth of the population due to higher net immigration, Mr Rosenberg said.
The economy was estimated to have grown 0.9% in the three months to September but it grew only 0.4% per person and shrank by 0.2% when looking only at the production from which New Zealand residents felt the benefit.
Productivity growth was still weak and that did not bode well for future increases in wages, he said.
Westpac senior economist Michael Gordon said the 0.9% growth partly represented payback for the weaker than expected pace of growth over the first half of the year. June quarter growth was revised down further to 0.3%.
The growth was domestically focused in the September quarter, with weakness in agriculture but strong gains across manufacturing and a range of services.
The main sour note was an unexpected large fall in construction, related to the "lumpy'' civic components, he said.
Estimated growth over 2014 had been revised up by a sizeable amount with growth over the calendar year now estimated to be 3.7%.
"This also reinforces the degree to which the economy's momentum has slowed this year.
"We caution that solid GDP growth needs to be seen in the context of very strong population growth. The pace of GDP growth has slowed in per capita terms. Low inflation and rising unemployment indicate the economy has been operating with increasing spare capacity,'' Mr Gordon said.
At a glance
• September quarter economic growth of 0.9%.
• Tourism and manufacturing drive growth.
• Economy operating with spare capacity.
• GDP growth slows per capita as immigration remains high.
