Tomorrow's third-quarter GDP figures are likely to highlight an underlying theme in New Zealand of strong growth, led by the construction and dairy industries.
Analysts are picking GDP growth of around 0.7-0.9% last quarter, which would be a gain on second-quarter growth of 0.5% but not quite as solid as the three previous quarters when the economy grew 1% consecutively.
Year-on-year growth is expected to have moderated to 3.3% in the September quarter from 3.5% previously.
The Reserve Bank of New Zealand (RBNZ) is on the more optimistic side of forecasts, expecting growth of 0.9%.
Westpac economists say there are two contrasting stories of New Zealand's economy that are playing out at the moment. "There's the 'real' story, where the level of activity is forging ahead at an above trend pace. Then there's the 'nominal' story, where income growth in dollar terms is set to slow sharply as dairy export revenue plunges."
According to Statistics New Zealand, dairy prices tumbled 11.4% in the third quarter, while volumes were up slightly.
But with dairy prices having tumbled around 50% from a peak in February, economists predict dairy revenue will be slashed by around $6 billion this season.
Overall though, the forestry sector is likely to be the biggest under-performer by a wide margin, Westpac economists predict, with production falling by about 4% for the second quarter in a row.
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