After a year in which the New Zealand economy performed much better than anticipated, the flow of good news has continued in 2021.
After strong results in the latest GlobalDairyTrade auction on Wednesday morning, Westpac raised its forecast for dairy giant Fonterra's payout to its farmers to $7.50 per kilogram of milk solids this season.
If this turns out to be correct, it would represent the highest payout in seven years for a sector of the economy that was arguably still New Zealand's most important, even before international tourism was effectively suspended by Covid-19.
News of strong farmgate prices came a day after the QSBO, the leading survey of business confidence from the New Zealand Institute of Economic Research, showed employers were hardly bullish at the end of 2020, but showing signs of greater willingness to hire and invest, as demand improved.
The survey suggested New Zealand will get at least modest growth this year.
Other signs point to a buoyant mood. Although sales for 2020 as a whole were down on 2019, car dealerships are reporting strong sales over the summer, likely boosted by low interest rates and a lack of overseas travel.
Unemployment has risen, but only to 5.3 per cent, well below what it was expected to midway through 2020 and there is now a strong chance that it may not rise as high as it did in the global financial crisis.
Much of New Zealand's strong performance comes down to its management of Covid-19, which has allowed most of the economy to reopen as normal.
Government spending has cushioned a downturn in demand and lower business investment, at the same time as consumers have consumed, softening the impact of a lack of international visitors.
Elsewhere, New Zealand's fortunes are being dictated far away. As usual, the outlook for commodity prices are dictated by solid demand in China and the inability of other markets to respond.
Just as commodity prices could quickly fall, it would be wise not to simply assume the other drivers of New Zealand's recovery can continue indefinitely. Just as complacency poses a risk to our ability to stop another Covid incursion, it could threaten our ongoing prosperity.
Although the Government's response to Covid-19 has done a remarkable job protecting the labour market, it has come at significant cost to the Crown's balance sheet.
Unless circumstances become dire, such spending is unlikely to continue. During the second lockdown in Auckland in August, the Government refused to bow to calls to extend the wage subsidy when the restrictions were lengthened.
Likewise consumers can not be relied on for further stimulus. Last year's spending was boosted by pent-up lockdown demand, the lack of overseas travel and low interest rates. New Zealand's low savings rates means those will only be temporary.
Should the virus return, or the labour market soften, spending could easily fall off.
The only realistic way for New Zealand to continue to remain in such solid shape would be through stronger business investment, to fill whatever void is left by softer Government spending, but also to ensure New Zealand's incomes can grow irrespective of fickle commodity export prices.