Strong growth in the manufacturing sector saw economic activity rise much more quickly than expected in the March quarter.
Figures from Statistics New Zealand (SNZ) today showed gross domestic product grew at 0.8 percent in the three-month period.
That confounded experts, with the median forecast from economists having been for growth of 0.4 percent.
For the year GDP was up 1.5 percent, compared to 1.2 percent forecast.
The figures sent the already soaring New Zealand dollar to new post-float heights around US84.90c, having been at US84c just before the data was released at 10.45am.
SNZ national accounts manager Rachael Milicich said the strong growth in the latest quarter, despite the devastating February 22 earthquake in Christchurch, was mainly due to manufacturing.
"While some businesses in Christchurch were adversely affected, the vast majority were able to continue operating, and the earthquake resulted in some activity that would not normally have taken place."
Manufacturing activity rose 3.6 percent in the March quarter, with large increases in machinery, metal product, and food and beverage manufacturing.
Real estate and business services were up 1 percent in the quarter due to rises in business services, but construction activity was down 4.3 percent.
The 0.8 percent GDP rise in the March quarter, followed a rise of 0.5 percent in the December quarter, and was the largest gain since the December 2009 quarter.
Activity in primary industries was down 0.6 percent in the quarter, with a 5.3 percent fall in mining activity, the third consecutive quarterly fall. The latest fall in mining was due to a fall in extraction activity, partly offset by a rise in exploration, SNZ said.
Agriculture activity rose 1 percent in the quarter -- following three quarters of decline -- due to a rise in milk production, partly offset by a fall in wool production.
For the goods producing industries as a whole, activity rose 1.4 percent in the March quarter, following a 2.2 percent rise in the December quarter.
The 3.6 percent rise in manufacturing was the main contributor to the gain, and followed a 3.4 percent rise in manufacturing in the December quarter.
Machinery and equipment manufacturing was up a record 16.1 percent, while metal product manufacturing gained 8.7 percent on top of a 25.9 percent rise in the December quarter.
Activity in the food, beverage and tobacco sector rose 2 percent in the quarter, with dairy product exports up 9.8 percent.
Printing, publishing and recorded media fell 11.3 percent, while furniture and other manufacturing fell 8.8 percent.
A 0.5 percent rise in activity in the service industries, included a 2 percent gain in retail trade activity, the highest in four years.
Goldman Sachs economist Philip Borkin said the result was "pretty remarkable".
"It clearly shows that the disruption to the economy from the earthquake was less than expected, and the economy was really honking along in the first three months of the year."
But UBS senior economist Robin Clements questioned whether SNZ had captured the effect of the earthquake properly. He had his doubts.
