The economy grew by 1 percent in the first three months of the year, boosted by a jump in construction activity.
Official figures show the March quarter figure was slightly weaker than the Reserve Bank and most economists were expecting.
Construction activity grew 12.5 percent in the March quarter, the largest increase in building activity in 14 years.
Statistics New Zealand said the sector was responsible for two thirds of economic growth in the quarter, with strength in residential and non- residential building in Canterbury and across the country.
Dave Wilson, of Jennian Homes, said its franchises were bouncing back to 2007's peak levels and customers were ordering bigger homes again. He said people were still buying new homes despite rising interest rates.
The figures also show tourist spending surged nearly 8 percent, while spending by households was flat.
Whakatane-based White Island Tours says it is recovering after a three-year slump and taking bookings for 2016 despite the high New Zealand dollar.
The annual pace of growth was 3.8 percent - its highest in nearly seven years. That means another interest rates rise in July before the Reserve Bank eases up with its programme of monetary tightening.
