Booming provincial areas are helping the economy as cities start to slow down, a group of Infometrics economists have found.
Infometrics' chief forecaster Gareth Kiernan says provincial economies are driving growth in the economy, building on the recovery of dairy prices in 2016, and spending activity is outpacing activity in the main centres.
"We're seeing the payoff from the last couple of years where we've had strong commodity prices across the board and recovering dairy prices as well, and that's leading to more spending out in the provincial economies," Mr Kiernan said.
In the Bay of Plenty, kiwifruit exports are flourishing, which is helping provincial towns such as Te Puke.
However, there are also risks to provincial areas, including major labour shortages - particularly for seasonal workers.
Locals say they are noticing a shortage of workers as businesses continue to thrive, especially in the kiwifruit industry.
New Zealand Kiwifruit Growers CEO Nikki Johnson says the fruit is popular overseas and she sees no sign of it slowing down.
"All the money that we generate from our export earnings is returned directly to the communities here - through the growers, through the packhouses, through the support industries or through the communities we operate in," Ms Johnson said.
New Zealand shipped exports worth $54 billion overseas - an 11 per cent rise on the year before.
However, household costs are continuing to rise and it's hitting people in the pocket across the country.
Mr Kiernan says the cities are slowing down, particularly when it comes to migration, house prices and growth.
Infometrics predicts GDP growth of two per cent between now and 2021.
"It's certainly not doom and gloom. We're not talking about a recession, but more of a slowdown," Mr Kiernan said.
SHARE ME