Keeping tabs on Christchurch’s population

Much has been made of the likelihood that Christchurch willsuffer a significant hit to its population in the aftermath of the earthquakein February.  Good information on population movements within New Zealand isalmost non-existent, but Statistics NZ is currently monitoring re-enrolments ofschool students from Christchurch and surrounding areas following the quake. This article examines the initial trends, although it is too early to try anddraw conclusions about the implications for population growth in Christchurch.

Sluggish credit growth not just a cyclical phenomenon

Speaking to parliament’s finance select committee a couple of weeks ago, Bill English was once again talking down the economy, highlighting the possibility that 2010 ended with a double-dip recession. Along with weak consumer confidence and falling house prices, Mr English pointed to a lack of credit growth as one of the reasons for the economy’s failure to keep improving throughout the last year.

From the beach 2011

To spend or to save?  Households have veered towards thelatter over the last three years – good news for the perceived imbalances inthe economy but bad news for businesses hunting for the consumer dollar.  Firmswill be hoping for some respite from the consumer frugality in 2011, but thespending pick-up looks like it will need to occur without any assistance fromthe housing market – at least in the first instance.

The return of the “W”?

In my travels around the country over the last month visiting and presenting to clients, it’s been difficult to find people who are happy about business conditions at the moment. There were small pockets of optimism in areas such as the forestry industry or Southland’s dairy sector. But the bulk of businesspeople are hanging tough: fighting to keep costs down, trying to identify growth opportunities in a stagnant market, and hoping that a more pronounced economic recovery materialises in 2011.

Rebalancing: fact or fiction?

The existence of household caution, strongexport growth, and fundamentally different credit conditions have convincedmany analysts that the New Zealand economy is undergoing a step change.  Thischange is termed rebalancing.  We continue to believe that fundamentalrebalancing has not occurred – although there are some areas of the economywhere changes will be permanent.

Is another downturn on the cards?

Share market performance was pretty crappy during Junethanks to growing fears about a double-dip and worries over government balancesheets and spending.  Is another downturn on the cards?  That’s certainly whatfalling government bond rates seem to be suggesting, and it is a potentialscenario we pay attention to.  However, we think we are more likely to see aslowing in growth rather than an outright collapse – a view we lay out in moredetail in this article.

Taxpayers taking risky bet on Kiwibank

There has been public debate recently about the merits or otherwise of selling or partially selling Kiwibank. Public opinion is currently strongly in favour of the Government retaining 100 percent ownership of the bank. Bowing to this support, and belatedly recognising pre-election pledges from Prime Minister John Key not to sell Kiwibank, the Government has indicated it will not seek to offload the bank in part or whole. That is a pity because over time taxpayers could pay a high price for this investment.