Who's the hero of the GDP rebound? You are ... you and your credit card

Kiwis answered the call to spend in the September quarter, boosting the country's GDP. Photo / File

COMMENT:

"Wake-up, go and spend", said the Reserve Bank Governor Adrian Orr in August as he cut rates by 50 basis points.

Economic growth was flagging and he was keen to encourage some stimulatory activity.

As sacrificial asks of the public go, it was hardly Churchillian.

But New Zealanders stepped up, we rose to the call.

We heroically splurged on giant TVs and new phones.

Now as September GDP growth surprises on the upside - at 0.7 per cent - it appears to have paid off.

The latest numbers took annual growth to 2.3 per cent (or 2.7 per cent if you prefer average annual change).

"Retail industry growth of 2.4 per cent in the quarter was boosted by robust spending on electronics such as appliances, mobile phones, and computers after a quieter period in the June quarter," said StatsNZ national accounts senior manager Gary Dunnet said.

The stronger GDP result comes after strong rebounds in both business confidence and consumer confidence in November.

ANZ's Business Outlook this week showed confidence levels back to where they were in November 2017 as the Coalition Government came to power.

The Westpac McDermott Miller Index showed Consumer confidence completely reversed this year's decline in the December quarter. People's optimism about their own finances hit the highest level in a decade.

The economy has also been buoyed by strong export commodity prices and a lift in the Auckland housing market.

New Zealand's recent GDP path also got some serious revising in the latest release.

Put simply, it turns out things were better in late 2018 than we thought and worse in the first half of 2019, before the latest rebound in the third quarter.

Reserve Bank Governor Adrian Orr. Photo / Mark Mitchell

The net result is that we've ended up not too far off where we thought we'd be all along.

It also points to the possibility that we're through the worst of the current economic cycle.

"It was the annual revisions to GDP that provided the most important insights on the economy's recent performance," said Westpac senior economist Michael Gordon.

"Rather than a gradual decline in growth over the last two years, the slowdown appears to have been shorter, sharper - and probably already over, judging by recent activity indicators."

"Our view remains that the September quarter likely marked the low point for the economy this year – there is a growing range of evidence that points to a lift in momentum since then."

If that's a case then consumers can take a bow.

With our trusty credit cards we've spent our way through the economy's darkest hour.

Of course, in seriousness, we should be thankful, that it was never really all that dark.

Now, hopefully, as we head into 2020 we'll see GDP underpinned by the more productive end of the economy.