Retailing, construction and accommodation all played a part in buoying final-quarter 2015 gross domestic product (GDP) data beyond analysts' expectations.
GDP increased 0.9% for the December 2015 quarter, boosted by the service industries, Statistics New Zealand national accounts senior manager Gary Dunnet said.
"Business services in particular posted a strong increase, as well as retail trade and accommodation,'' he said.
He said the strong performance of the service industries, which grew 0.8% overall for the quarter, was offset by declines in the agriculture and manufacturing sectors.
The service sector growth was reflected in increased household spending on services, up 1%.
"There was higher spending on restaurant and ready-to-eat meals, accommodation, and international air passenger services,'' Mr Dunnet said.
The increase in household spending contributed to the 1.1% increase in the expenditure measure of GDP.
ASB senior economist Jane Turner said the result was better than expected and the headline result was strong, but "the details were not that flash''.
"GDP growth was slightly stronger than expected, largely due to strong business services demand, retail activity and construction.
"[However] while headline growth appears reasonable and encouraging, per-capita income growth remains flat and highlights New Zealand's economic vulnerabilities going forward,'' Mrs Turner said.
Westpac chief economist Dominick Stephens also said it was a better than expected result, and construction and retail sales had "exhibited impressive growth''.‘
"We were more surprised by the extent of weakness in agriculture, mining, and food manufacturing,'' he said.
Conversely, some service industries such as information media and communications, financial and insurance services, and professional, scientific, administration and support services, were stronger than expected, he said.
"Through the year, GDP growth of 2.3% sounds impressive until one considers that population growth over the same period was around 2%. GDP growth per capita is actually very sluggish at present,'' Mr Stephens said.
He said the split between goods and services was expected to continue into 2016, with a slight slowdown in the pace of growth in early 2016.
GDP expanded 0.9% in the three months to December, the same pace as the September quarter.
That was more than the 0.6% projected in a Reuters poll of economists and the Reserve Bank's forecast of 0.7%, BusinessDesk reported.
Record inbound net migration has been underpinning New Zealand's economy over the past year and a-half as fewer Kiwis depart for Australia, and on increasing numbers of international students arriving, The swelling population has meant increased economic activity has not driven up prices as much as the Reserve Bank would have estimated, BusinessDesk reported.
Bank governor Graeme Wheeler last week cut the official cash rate a quarter point to a record low 2.25% to try to lift inflation back within his target band of between 1% and 3%.
