Infometrics
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Infometrics May newsletter
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May 2021
NEWSLETTER

In our May 2021 newsletter, Senior Economist Brad Olsen breaks down Budget 2021 after analysing the documents from cover to cover. He looks at what’s been funded, how the fiscal and economic forecasts look, and how capacity and capability constraints might limit further execution.  

Senior Economist Nick Brunsdon examines how tourism activity has fared over the summer season, finding a healthy boost in domestic travel over the holidays, but with international tourist hotspots still hard hit. 

With heightened attention on rents and housing costs, Brad has dug into our rental data and highlighted the need for caution in interpreting results, with a change in data collection and delivery meaning large revisions can skew trends.

Our latest Quarterly Economic Monitor shows a sluggish start to the year for regional economies, with some areas continuing to recovery fast but others seeing economic momentum faltering a touch. Our media release details some of the key findings.

Finally, Brad rounds out the newsletter with our Chart of the Month – focusing on the spike in electricity prices with a chart that may shock some viewers.

Budget 2021: Spending boosted, but delivery will be closely watched
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The 2021 Budget showed a much-improved economic outlook from the Treasury, but also further raised questions about the ability for the government to execute its ambitious policy agenda. Along the large spending commitments, and improvements in the government’s fiscal position were signs of some restraint.
Did the domestic tourism boost reach the regions that needed it most?
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The global tourism industry was hit hard by unprecedented disruption from COVID-19 and ensuing travel restrictions in 2020. In New Zealand, the international tourism tap was firmly turned off. On the flipside, New Zealanders developed a newfound appreciation for their own backyard, ticking our beautiful glaciers, fiords, and more off their bucket lists.
Beware the (in)accuracy of rental data
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Recent concerns around the cost of housing have shone a spotlight on residential rents, with the previously unremarkable indicator now closely watched. But substantial changes to how rental data is now collated means that extreme caution should be used to evaluate recent rental trends.
Media Release: Sluggish start to the year for regional economies
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The summer of 2020/21 provided a boost to a number of regional economies even as traditional tourism hotspots remained hard hit by the loss of international tourism. The latest Infometrics Quarterly Economic Monitor points to a faltering in the overall economic recovery, with a further divergence across New Zealand. Some parts of the country have continued to recover further but other areas show patches of softer economic activity.
Chart of the Month: Spiking electricity prices a shock to the system
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Electricity prices have spiked in recent months, with the cost of generating power pushed up by low hydro lake levels and decreased gas output.