Baby growth is in the 40th percentile

I'm 34 weeks pregnant and i was diagnose with GD I went in for an ultrasound. Doctor told me my baby is 4 lbs she a couple of oz. Baby is in the 40th percentile. I really don't know what that means he is not worry he said I'll just have a small baby. My previous baby was 8lbs 8oz and i didn't have GD. Also i have been getting contractions for the past 3 weeks however I'm not dilated. I hope he doesn't come early.