Economists have raised the alarm about New Zealand's growing reliance on dairy and forestry while other export industries stagnate.
Overall the economy looks in rude health, with GDP up 1 per cent in the March quarter and 3 per cent for the year, while goods exports increased by $4.3 billion (10 per cent) to nearly $49b in the year ending March 30.
But economic consultancy BERL said the positive headlines masked some concerning trends.
Export growth in the past year was dominated by the forestry and dairy sectors, which both had increases of 30 per cent.
"However, outside of dairy and forestry, all other categories combined to register less revenue than the previous year," BERL said in its latest monthly report.
"Indeed, outside of dairy and forestry, export receipts have effectively flatlined since April 2009.
"Yes, that's five years of running to standstill."
As a result, dairy and forestry had increased their combined share of New Zealand's export receipts to 40 per cent from 20 per cent 10 years ago.
"The risks inherent in such a narrowing of our export base should be of concern to all."
It's not just our narrow range of exports that is causing alarm bells to ring.
New Zealand's fast-growing trade with China is boosting our economy but some commentators, such as New Zealand Institute of Economic Research chief economist Shamubeel Eaqub, say our growing reliance on one country leaves us vulnerable.
Speaking at an investment conference last week, he said our exports had grown by $5b in the past five years but exports to China had grown by $7b, meaning exports to other countries fell by $2b.
"Not only are we exporting more to fewer countries, we are exporting fewer products to fewer countries," he said.
New Zealand Manufacturers and Exporters Association chief executive John Walley said New Zealand was suffering from a lack of "complexity" in its economy.
New Zealand ranked only 52nd in the 2012 Economic Complexity Index with a score of 0.47, well back from top scorers Japan (2.38) and Switzerland (2).
"If you look at New Zealand as a business, you've got two products and one customer. That's not a very good business to buy in terms of resilience or value," Walley said.
He said New Zealand had taken the approach of "stick to your knitting and get rid of things you aren't good at" but countries that had protected manufacturers had tended to do better economically over the past 30 years.
The strong New Zealand dollar is the biggest challenge facing exporters, according to a new survey by freighting firm DHL Express New Zealand.
Half of those surveyed said it was having a negative impact on profit and half said it was affecting their ability to compete with overseas competitors.
The survey also showed that exporters are focusing on areas of their business they can control such as looking at new markets and offsetting costs through importing.
To specifically combat the high dollar, more than a third (39 per cent) of exporters had a repricing strategy in place, and 36 per cent were looking to new markets.
Some 74 per cent of exporters are also importing, with just over a quarter (27 per cent) purposely looking to purchase more imports or raw materials overseas to offset the impact of the high dollar.
- Sunday Star Times