Downside risks to NZ’s growth outlook accumulate

New Zealand’s provincial economies are poised to drive growth in the economy, building on the recovery in dairy prices during 2016, according to Infometrics latest economic forecasts. Spending activity in the regions is comfortably outpacing activity in the main centres, with commodity prices for most exports holding at high levels.

Trump’s tariffs threaten to start a trade war

Last month, US President Donald Trump imposed tariffs on imports from Canada, Mexico, and the European Union, alongside tariffs on over US$34b of Chinese imports. Taking into account tariffs imposed earlier this year, about US$90b of Chinese imports to the US are now covered, with threats that all US$505b of Chinese imports could yet be hit.

Media Release: Provincial New Zealand dominates economic growth prospects

New Zealand’s provincial economies are poised to drive growth in the economy, building on the recovery in dairy prices during 2016, according to Infometrics latest economic forecasts. Spending activity in the regions is comfortably outpacing activity in the main centres, with commodity prices for most exports holding at high levels.

Giving eradication our best shot means supporting farmers all the way

Mycoplasma bovis (M. bovis) is spreading fast in New Zealand and causing devastating effects for farmers. The Government this week announced an ambitious attempt to stamp out the disease, through mass culling and strict restrictions on farmers. M. bovis causes a wide range of problems in cattle, ranging from pneumonia to arthritis. The government says they have a good shot at eradication… if they act now.

Getting down to business, or getting businesses down?

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.

Log exports boost freight traffic

Exports made their rebound in the June quarter, with volumes up 6.8% from March (seasonally adjusted). Rising prices on the international market have supported a lift in dairy, horticultural, and forestry export volumes – so much so that Eastland Port boasted record log shipments in the month of June. Although the recovery in export prices has brought demand for heavy vehicles back on line, there are concerns about the consequent increases in road maintenance costs.

Crop farming – are better growth conditions ahead?

After a few tough years, the prospects for New Zealand’s primary sector are currently looking pretty good. There is a lot of commentary going around about the potential $6 trifecta for dairy, beef and lamb prices, while kiwifruit growers and wine producers are also looking forward to continued buoyant returns. One part of the primary sector, however, that doesn’t perhaps get the coverage that it warrants is arable.

Is the Reserve Bank Governor impotent?

It has been a bit of an unusual time recently in the banking sector following the Reserve Bank’s cut of the official cash rate by 25 basis points to 2.0%.  Instead of playing ball and passing on this cut to mortgage holders and other borrowers, the major retail banks, with the notable exception of Kiwibank, passed on mere crumbs and, intriguingly, lifted the interest rates they offer to term depositors.