1%-1.3% rise in GDP expected

Analysts are expecting third-quarter gross domestic product (GDP) to leap by 1%-1.3% today, on the back of strong agricultural and primary manufacturing data.

Recent dairying strength is expected to lead to a manufacturing boost, with the construction and housing sectors also underpinning gains, followed by increased household consumption.

In a week of swathes of positive data being released, showing strength in manufacturing and service industries, construction and burgeoning, but worrying, housing market prices, Statistics New Zealand GDP data being released today was expected to be the ''centrepiece'' of attention, BNZ senior economist Craig Ebert said.

''We believe it [GDP] will show the economy is busy, and will get even busier next year,'' he said.

Mr Ebert is picking GDP will be up 1% to 3.2% for the quarter, while ASB economist Christina Leung is picking a 1.3% gain to 3.5%.

During the past week, Otago Southland put in strong performances again in the monthly manufacturing and services sectors, streets ahead in expansion compared with the other three regions making up the two indexes.

Ms Leung said yesterday general business confidence had reached a ''very high level'' - its highest in almost 15 years - and the separately released ANZ monthly business outlook survey yesterday mirrored other data.

ANZ chief economist Cameron Bagrie the bank's survey had ''incredibly strong results''. Firms' own business expectations were at their highest since mid-1994 and expected profitability beyond last month's 19-year high.

''Throw together some localised one-offs; a city rebuild, plans to address housing shortages in the nation's largest city and a 40-year peak in terms of trade and the growth picture takes on `tiger' characteristics, as opposed to `tabby','' Mr Bagrie said.

While demand looked ''remarkably assured'' he cautioned the New Zealand dollar would remain high, there were global economy ''flip flops'' to come and the New Zealand balance sheet was ''weak''.

Mr Ebert said the 1% GDP gain was expected from agriculture production, mainly from the dairy sector, following the severe impact of droughts in the first half of the year.

''This, in turn, should help engender a bounce-back in manufacturing, while construction also improves on [what was] a wobbly second quarter performance,'' he said.

Ms Leung similarly picked agriculture and primary manufacturing as the quarter's focus, saying both Canterbury and its rebuild and Auckland would remain ''key drivers''.

''We expect growth in the construction activity and household consumption will underpin the New Zealand economy over the coming years,'' she said.

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