KEY POINTS:
Economic growth slowed markedly in the September quarter as consumers lost their appetite for spending and exporters continued to struggle.
Gross domestic product expanded 0.5 per cent, only half its average rate over the previous two quarters.
It would have been weaker still, 0.3 per cent, without the contribution from the Tui offshore oil field coming into production.
But the boost from Tui was not enough to offset a 2.2 per cent contraction in the manufacturing sector.
Agriculture was flat and the services sector managed only a 0.7 per cent increase, its weakest growth for more than a year.
Bank of New Zealand economist Stephen Toplis said the data showed growth slowing to a below-trend rate.
"A weakening in private consumption is leading the way but exporters, too, are under pressure from the rising New Zealand dollar. All of these features are here to stay through the December quarter and the first half of 2008."
Growth in consumer spending slowed to 0.3 per cent, from 0.4 per cent in the June quarter and a rip-roaring 2.1 per cent in March, as households were squeezed by higher mortgage rates, food prices and petrol prices.
Government spending, on the other hand, rose 2.1 per cent in the quarter, the biggest increase for more than two years.
"That's a sign of things to come," said Westpac economist Doug Steel.
Residential construction increased 1.9 per cent, making 6.8 per cent for the year.
Spending down
* The economy grew 0.5 per cent in the third quarter, pushing annual average growth to 2.7 per cent, its highest since March last year.
* But as consumer spending, which makes up three-fifths of the economy, is slowing and exporters are still battling a high dollar, economists expect growth to slow next year.
