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Infometrics August newsletter
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August 2021
NEWSLETTER

New Zealand is back in Level 4, and our team has been examining how Lockdown 2.0 will be affecting the economy, alongside our other usual operations.

In this month’s newsletter, Principal Economist Brad Olsen takes an extended look at Lockdown 2.0, what’s happened to the economy, and why the economy is well positioned to rebound. Our latest Quarterly Economic Monitor was released last week, and our media release confirms regional economies were resilient in the lead up to Level 4 and will drive the eventual bounce back.

As we start to look at recent data on the economy, Senior Economist Rob Heyes’ article on real time data is pertinent, with a need to balance speed with precision in short-term data. Also topical is Senior Economist Nick Brunsdon’s examination of housing affordability across New Zealand, inspired by recent work by Emma Vitz – the maps might be colourful, but the picture they paint isn’t as pretty.

Finally, Brad rounds out the newsletter with a Chart of the Month examining interest rate terms, finding that two-thirds of all mortgages will need to be repriced in the next year – at a time when interest rates are rising and are set to continue heading higher.

Lockdown 2.0 delivers a setback to NZ economy
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New Zealand remains at Alert Level 4 as we work to stamp out the COVID-19 Delta variant from the community. Level 4 is a tough blow to the economy, and the immediate impacts are becoming clear. New Zealand’s economy has shown itself to be reliant in the face of COVID-19, and we expect a similar bounce back in activity once Alert Level restrictions are eased. A week into Lockdown 2.0, we highlight how the economy has responded, and what might be next for activity.
Media Release: Regional economies show resilience ahead of Alert Level 4 economic hit
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New Zealand’s economy continued to strengthen and grow in the second quarter of 2021, with regional economies driving economic activity. The June 2021 quarter Infometrics Quarterly Economic Monitor shows a further improvement in economic conditions, driven by rising employment, upbeat households, and rocketing building activity. The stronger economic results for the regions position the New Zealand economy well to tackle the latest setback as the country moves to Alert Level 4.
Real time data: handle with care
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In the past 12 months clients have increasingly been asking us for real time data. This is understandable. Rob Heyes looks at the ways that real time data is used in economic analysis and the trade-offs that need to be considered when using real time data.
How hard is the housing market around the regions?
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Drawing inspiration from Emma Vitz’s maps showing how much income is needed for housing costs around New Zealand’s regions, we thought we’d compare costs with household incomes across cities and districts.
Chart of the Month: How long until interest rate rises hit borrowers?
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The Reserve Bank’s August 2021 Monetary Policy Statement made it clear that interest rates will continue to be pushed higher. Demand conditions across the New Zealand economy are strong, but supply issues are creating heightened labour market and inflationary pressures.