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Recent releases

Consents climbing higher Our early estimate of non-apartment consents from BCI New Zealand is 1,683 approvals in June. This result would bring annual consent numbers to their highest level since June 2008. Despite the boon of the Canterbury rebuild, the housing market is still softening under the effect of loan-to-value restrictions, posing a downside risk to our construction forecasts. Read more

Business tourism on the rise Both tourist arrivals and departures eased in June, falling 0.3% and 4.5% respectively in the month (seasonally adjusted). Despite these drops, the two figures remain higher than levels a year earlier, and are expected to trend upwards as both the New Zealand and overseas economies improve. Read more

Commentary

Not-so-buoyant prices Market expectations, consumer price inflation was just 1.6%pa in the June quarter. Tradable inflation was positive for the first time since March 2012 but, the 0.1%pa lift did little to top up the unexpectedly weak non-tradable inflation result. Non-tradable inflation of 2.7%pa was the slowest in a year which, alongside another drop in dairy prices and softer business confidence results this month, could put the Reserve Bank off hiking the official cash rate between now and at least December.
Can we improve the election process to get better policy? Despite this general level of comfort with New Zealand’s political system there is always room for improvement. My general concern is that the quality of policies should be as high as possible. By this I mean that policies introduced are most effective in delivering the intended outcomes and that unintended side-effects are minimised. I think it is totally appropriate that policies reflect the philosophy of the elected government and the interests of the electorate, but it annoys me when policy does not look like it will be as effective as it could be, or delivers outcomes in a costly way. Read more.

Dispelling some myths about regional economic performance There has been talk of late that the gap between the economic performances of our provinces and major urban environments is widening. However, even though these types of comments have been well intentioned, generalised conclusions of this nature are unsubstantiated by economic data and unhelpful from a policy perspective. Apart from some isolated cases of regional struggles, the majority of provincial economies have outperformed major cities over the past decade. Read more.

Latest Forecasts

Venturing out of the shadows

The New Zealand economy has well and truly proven it is undead, recording three consecutive quarters of growth above 1.0% for the first time since 2003/04. Strong growth is set to continue over the next two years as domestic demand remains buoyant, the Canterbury rebuild reaches its peak, and export incomes hold at relatively high levels.