Economists were surprised by an small expansion in gross domestic product yesterday - as opposed to booking a sixth consecutive contraction - but the slight, less than 0.1% shift received only tentative praise.
The positive news saw the New Zealand dollar, which had hit a 13-month high overnight of US72c, spike by more than half a cent to US72.7c over 30 minutes, gain strength against the Australian dollar and interest rates also lifted.
Statistics New Zealand, on releasing the data, noted the 0.1% lift was "so close to zero, no significant conclusions can be drawn that this is a turning point".
Minister of Finance Bill English noted the growth was "only marginally positive" and could still be revised into a decline, but it revealed the economy was through the bottom of the trough and was stabilising.
Economists had generally picked GDP for the second quarter to the end of June to continue to decline, at around -0.2%, but yesterday's result was largely underpinned by export contributions - up 4.7% mainly due to dairy volumes and other commodity strengths - while import volumes fell 3.8% on weak domestic demand, according to ASB economist Jane Turner.
However, she cautioned it was "within the realm of possibility" there would be another negative GDP quarter during the next year and the initial stages of recovery would remain fragile, with business profitability still under pressure and unemployment continuing to rise.
"Back in black in the growth stakes - for now at least," Ms Turner said.
"But before anybody starts popping Champagne corks and declaring the recession is officially over, it's worth remembering the growth we expect in the second half of the year is still very weak, and like in second quarter, is just a margin of error between slight expansion or contraction," she said.
Consumer spending increased 0.4%, non-residential investment was up a surprising 1.3%, and residential work held up better than expected, with a modest decline of 2.6%.
However, Ms Turner said "pockets of weakness" remained in the economy, including exports of services down 2.6%, and a 1.6% decline in the volume of tourist spending, Government spending down 1%, mainly in education, and manufacturing stocks falling $1.1 billion.
