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.
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.
New Zealand’s economic growth is being constrained by shortages of labour in key areas, and this problem will become more widespread if there is a significant and rapid tightening in migration policy following this year’s election, warns Infometrics Chief Forecaster Gareth Kiernan.
Infometrics’ latest forecasts show house prices falling in the second half of 2017, as the flow-on effects of tighter mortgage lending conditions and higher interest rates dampen demand. The emergence of flat or falling house prices within the next few years will undermine consumers’ willingness to spend, while the discretionary portion of households’ budgets will be squeezed as interest rates gradually rise from their historic lows.
Economic conditions in Southland improved slightly in the December quarter, with Infometrics’ provisional estimate of GDP showing growth of 1.4% over the December 2016 year. Improvements were seen across a range of indicators, including retail spending, vehicle sales, guest nights and migration. Traffic flows rose 3.3% over the year.
Auckland is New Zealand’s engine and is expected to outperform the national economy over the next four years, according to Infometrics Regional Perspectives report released today. The Infometrics Regional Perspectives report provides an outlook for economic conditions in New Zealand’s regions and industries over the next four years.
The New Zealand economy has entered 2017 in good spirits, with Infometrics’ latest forecast predicting GDP growth over the three years to June 2019 will average more than 3.0%pa. However, Infometrics Chief Forecaster Gareth Kiernan believes the solid outlook for growth masks several risks that hang over the economy.
With its population forecast to increase by 254% within the next decade, Hobsonville is the fastest-growing area in Infometrics’ Regional Hotspots report released 24 November 2016.
Nelson-Tasman’s economy grew quickly over the first half of 2016, with Infometrics’ provisional estimate of GDP showing growth in Nelson-Tasman of 4.4% over the June year, compared with estimated growth of 2.7% nationally. Infometrics Senior Economist Benje Patterson says “Several factors have contributed to this growth, including increasing levels of building activity, a growing population, better conditions for primary sector exporters, and soaring visitor numbers into the broader region.”