Better growth in 2018 to prelude a more challenging next decade

Infometrics’ latest forecasts show the New Zealand economy still has more gas in the tank for 2018, despite the slowdown of the last 12 months and suggestions from some analysts that all the economy’s key drivers have already peaked. Infometrics’ Chief Forecaster Gareth Kiernan points to a buoyant export sector, increased government spending, and the perennial need to build more houses in Auckland as the key components of GDP growth averaging 3.4%pa during 2018 and 2019.

The Panama Canal: mosquitoes, a soft voice and a big stick

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 Wider Economic Benefits of Greater Connectivity

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.

Why are our car forecasts so much higher than last time?

We have revised up our car sales forecasts considerably over the five-year forecast period when compared to our February outlook. A big part of this long-term lift is a change in our forecasts for net migration. But there are also factors, such as high ownership rates and an improving economy, which are also going to push up demand for vehicles throughout our five-year forecast period.

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.

A quick note on seasonally adjusted car sales

Infometrics uses seasonally adjusted data to gauge month-to-month trends in car registrations. The purpose of doing so is to track whether there are any changes in momentum in car sales growth. It also helps us to look through the seasonal patterns that normally drive sales up or down in any given month. Examples of a regular seasonal pattern include strong growth in new car sales due to rental car purchases in October and November, or the lift in sales around the time of Fieldays in June. This article provides explains how we might use seasonally adjusted data and how we calculate it.

Gorge slip continues to squeeze traffic flows

The Manawatū Gorge remains closed following further slips on the route during May.  In this article, we take a look at the effect this closure has had on traffic flows and examine the costs of the alternative routes.  Spending on state highways over the next four years is expected to be around $9.2bn, but a surprising amount of transport funding has also been allocated to the rail networks. Lastly, we touch on the latest electronic card data, which suggests that the growth in spending on vehicles remains strong, but spending on other freighted retail items is more subdued.