We have revised down our expectations for GDP growth during 2018 in our latest economic forecasts (see Graph 1). Our previous forecasts, in October, were upbeat about prospects for the New Zealand economy this year, but a range of factors have combined to see that growth outlook soften over the last few months. These factors include persistent capacity constraints in the construction sector, changes in central government’s infrastructure priorities, and dairy prices that have been a bit disappointing.
A raft of unfavourable confidence surveys have been released over the last couple of months. Firstly, ANZ’s business confidence surveys for November and December showed confidence at a nine-year low. And last week the headline figure in the NZIER’s Quarterly Survey of Business Opinion (QSBO) fell into negative territory for the first time since 2015. Is the economy going downhill or are we just in an election-related blip?
Infometrics Christmas Carol, sung to the tune of “All I want for Christmas is you”.
The Labour-NZ First coalition has earmarked $1 billion per annum for regional development. Strong business cases will be needed by local authorities vying for a slice of these funds. Don’t over-rely on GDP in these business cases.
A sense of intrigue prompted David Kennedy to visit Panama City – an oasis of wealth and success in Central America. He was vaguely aware of its economic and historic importance: it is a metropolis of futuristic skyscrapers, an airline hub, a tax haven, a financial hub, a nexus of global trade, and a United States outpost of sorts. He knew that all these attributes related, in one way or another, to the Panama Canal.
The Oresund bridge between Copenhagen in Denmark and Malmo in Sweden, a truly transformational (€4 billion) transport project that led to economic benefits much greater than would be estimated using standard cost-benefit analysis.
Although something on that scale is unlikely in New Zealand, it does raise the question of whether investing in large transport infrastructure projects could deliver benefits additional to those estimated using the NZ Transport Agency’s Economic Evaluation Manual.
This election, we’ve brought back the Infometrics Misery Index, which looks at the state of the economy compared to previous New Zealand governments, to provide a sense test of how the electorate might be feeling in the lead-up to September 23.
New research released this month by Infometrics suggests that we might currently be underestimating net migration by between 4,000 and 8,000 people per year. These figures imply that net migration could be closer to 80,000pa than the latest official measure of 72,300.
It is Got a Trade Week, where a wide range of training and career opportunities in the trades and services industries are highlighted. But why focus on raising awareness of the trades and services industries? Simply put, they are industries that we can’t afford to ignore. Overall, they account for 75% of all employment in New Zealand!
Brad Olsen has only just reached his 20s and he’s met Queen Elizabeth II twice! He’s our youngest economist and is already making his mark both at Infometrics and in youth politics.
We chat with Brad about what a day in the life of an economist looks like…