The Kiwi economy increased by 1.6 per cent in the first three months of the year, according to a release from Stats NZ on Thursday.

The growth was a reversal from a 1.0 per cent drop in the last three months of 2020.

"After an easing of economic activity in the December quarter, we've seen broad-based growth in the first quarter of 2021," Stats NZ spokesman Paul Pascoe said.

"This is despite Auckland being in alert level 3 lockdown for 10 days, and continued border restrictions."

The result means New Zealand avoids a recession - defined as two successive quarters of economic contraction - in the volatile COVID-influenced landscape.

Finance Minister Grant Robertson hailed the result as proof New Zealand continued to outperform international rivals.

"New Zealanders' confidence in the recovery saw a boost in retail spending on big ticket items, eating out and holiday accommodation, offsetting the COVID-related loss of overseas tourists," he said.

Mr Robertson noted Treasury's forecast of a 0.2 per cent decline in the May Budget, and more recent industry expectations of a rise below 1.0 per cent.

The numbers also represent a return to to relative stability after a 10.8 per cent contraction in the June 2020 quarter and a 14.1 per cent increase in September 2020 - New Zealand's starkest fall and rise on record.

Construction activity rebounded after going backwards in the December quarter, rising 6.6 per cent or $NZ268 million ($A249 million).

A growth in services - the powerhouse of the Kiwi economy - was the biggest driver towards the 1.6 per cent gain.

Stats NZ said that included "wholesale trade (up 4.0 per cent), business services (up 1.9), healthcare and social assistance (up 2.8), and retail trade and accommodation (up 2.3)".

Mr Robertson said the New Zealand economy was 2.4 per cent above where it was a year ago.

This compares to 1.1 per cent growth in Australia, 0.4 per cent growth in the USA, 0.3 per cent growth in Canada and a 6.1 per cent contraction in the UK.

"New Zealand continues to outperform the countries we compare ourselves to on this measure," Grant Robertson said.

Australian Associated Press