But it also encouraged farmers to hold back lambs from the meatworks, contributing to a 2.5 per cent drop in manufacturing activity.
Manufacturing weakness was not confined to the food processing sector, however. Production of machinery, non-metallic minerals and textiles also declined.
Services were a mixed bag.
Finance, insurance and business services rose 1.3 per cent to be 4.2 per cent higher than a year earlier.
And retail, accommodation and restaurant activity rose 2.2 per cent, on top of a 2.6 per cent rise in the September quarter, boosted by the World Cup.
But activity in the public sector and communications both declined, 2.3 and 1.5 per cent respectively.
"We suspect communications is being mismeasured," Westpac chief economist Dominick Stephens said. "We don't believe New Zealanders are communicating with each other less."
Construction showed signs of improvement. It grew 1.5 per cent in the quarter, but it was still 8 per cent down on a year earlier.
ANZ economist Sharon Zollner said that through weaker manufacturing activity, output in the income-generating or tradeable part of the economy fell 0.6 per cent in the quarter, whereas activity in the much larger spending or non-tradeable side of the economy rose 0.7 per cent.
"The gap between the two sectors remains wide and there are structural imperatives for it to close. This will be challenging, considering the mix of monetary conditions [a high dollar and low interest rates] and the fact there is limited scope to increase dairy production in the short term."
On the demand side of the accounts, household consumption was up 0.8 per cent for the quarter and 2.4 per cent for the year.
That was an encouraging sign of improvement, ASB economist Christina Leung said, although the latest consumer confidence survey suggested a degree of caution remained. Investment in residential buildings rose 4.2 per cent in the quarter, but from a depressed base; in the previous quarter residential investment was at its lowest level for 18 years.
Business investment in plant, machinery and equipment fell 7.8 per cent in the quarter though it is up 13.8 per cent for the year.
"The decline in plant and machinery investment highlights the continued caution in the business sector," Leung said.
"The recovery in activity remains patchy in some areas, and while overall business confidence has improved, caution towards expansion of operations remains."
Zollner said the economy continued to muddle along through a recovery of fits and starts.
"Looking through the quarterly volatility, the economy is growing a shade under 2 per cent per year, which is about the best that can be expected in a world of debt payback," she said.
"We are wary of the risk of a post Rugby World Cup lull early this year, though the Canterbury reconstruction work will provide impetus."
Dawdling
* 0.3pc GDP growth in last three months of 2011.
* 1.8pc GDP growth for the year. Economy's growth in last quarter half that expected by forecasters
