The economy is expected to pick up at a faster pace than previously thought, as the manufacturing sector mends and the rebuilding of earthquake-hit Christchurch gets underway.
The New Zealand Institute of Economic Research's (NZIER) latest round-up of forecasts shows economists are slightly more optimistic.
They expect the economy to grow by 1.1% in the year to March, by 2% in 2012, and then by 4% in 2013 as rebuilding begins in Canterbury.
The latest rise in manufacturing sales has also led many economists to upgrade forecasts for economic growth for the first three months to this year.
NZIER chief executive John Ballingall says the economic recovery is broadening.
Meanwhile, a pick-up in the service sector is expected to continue in coming months, with Auckland leading the way.
The BNZ Business New Zealand Performance of Services Index rose slightly by 0.2 points to 52.8 in May.
While that is a slowdown compared with a 1.6% rise in April, a reading above 50 indicates that the service sector is generally expanding.
BNZ economist Craig Ebert says there has been a gradual improvement in activity for four months and he expects that to continue.
Mr Ebert says differences are becoming important for the economy, as Auckland leads the pick-up in the service sector and Canterbury lags behind.
