The economy remains on the path to recovery as interest rates fall and our commodity export prices outperform expectations, ANZ chief economist Sharon Zollner says.
She was commenting on results of the latest monthly ANZ Business Outlook Survey, which showed business confidence rose again during February, while inflation expectations dropped, but pricing and cost indicators were mixed.
"It seems clear from a wide range of indicators that the economy returned to positive growth in the last three months of last year," Zollner said.
GDP figures for the December quarter are due to be released on March 20. The figures for the September quarter released just prior to Christmas showed a 1.0% drop for the quarter, while revised figures for the June quarter released at the same time showed a 1.1% drop for that quarter.
Zollner says whether the GDP growth she expects in the December quarter will then falter - or strengthen - is a point of debate.
"It will depend on whether households view today’s interest rates as high or low, whether global uncertainty will constrain investment and employment or whether firms take a ‘get on with it’ attitude, and whether and when skill shortages will be a meaningful constraint on expansion," she said.
"...But firms are confident that the ducks are lining up for better times ahead.
"To be fair, that’s a low bar at this point," Zollner said.
In the latest survey, business confidence rose 4 points to +58 in February, while expected own activity eased 1 point to +45. Past own activity fell 3 points to -3, while past employment was flat at -7.
Pricing and cost indicators were mixed. One-year-ahead inflation expectations eased from 2.7% to 2.5%.
"Activity indicators saw a mix of small rises and falls in February but overall continue to tell a tale of the economy recovering as interest rates fall," Zollner said.
"Economy-wide reported past activity (the best indicator of GDP) eased a little but remains much healthier than six months ago. The improvement has been broad-based."
Inflation expectations "remain well behaved, encouragingly, down 0.2%pts to 2.5% in February".
"Firms’ numerical estimates of changes in their own costs and prices over the next three months were trending downwards, but that appears to have petered out. Firms on average expect costs to rise 2.3% over the next three months, while they expect to raise prices by 1.7% over the same period."
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35 Comments
Whatever, Sharon
This lot wants us to buy into their optimistic spin with the end goal of everyone loading themselves up with yet more debt!
The ground reality: larger engineering firms in town are announcing further job cuts in the dozens each because order books over the next 6 months make even 2024 look like a fantastic year. The entire construction sector seems to still be carrying excess capacity.
She’s a cocky bore, and just a spin merchant bankster. And has been very wrong on several occasions in the past couple of years
And yes, I am hearing / seeing the same news re: big engineering firms. I think I mentioned this 2-3 weeks ago.
Ignore these banksters and for that matter nearly all economyths
Not all doom and gloom, our factory (yes, we actually make stuff) has had a great start to the year. The last six months of 24 were steady but not super busy, we didn't get rid of anyone of the team, albeit we did do a deal to subcontract out a couple of staff to another firm for a couple of months in about October.
Jan and Feb this year have been busier than the same period last year and significantly up on Jul-Dec. Hey it might not last, but I'm optimistic.
Great!
May I ask what you manufacture?
Popcorn?
That factory would have been booming, not just average XD
That's great to hear.
We like to fool ourselves!! Own activity is down again versus a year ago. How many past ANZ surveys are displaying this fact! Also teh majority of the respondents didn't get the memo that on April 1st electricity goes up by 10% and the majority of council rates increase will exceed 10% this year...and insurance...and petrol/diesel.....
I'll have what's she's having barman...
NZ Economic recovery via more mortgage debt. I've seen this movie before - rinse and repeat.
Only this time, the young skilled Kiwis i.e. most creditworthy bunch have been leaving NZ in huge numbers. Who's going to take on those oversized mortgages in large enough numbers?
This the same Sharon Zollner who lost all credibility after a series of hilariously wrong predictions about the OCR?
Its almost like we dont like good news
A few people on here pop a vein when you say the words, we are back on track.
I think you would pop a vein if you talked to people who work in pricing in all sorts of companies.
A few people on here pop a vein when you say the words, we are back on track
'Back on track' P? What on earth do you mean? Ponzi running on all cylinders motivating Aotearoans to spend like drunken sailors?
If you're right, it's definitely good for Zollner's annual bonus.
@JC what Ponzi ? if you talking about investing in property - let me guess you are not and you really dont like people who did - you call it a Ponzi cause it makes you feel better that did not think of it, maybe a bit jelly ? You sound like a smart fella - dont invest in property its to difficult I can assure you there is no Ponzi. -
There are people on this forum who call it a Ponzi yet still buy property. You'd think they'd get out now while they still can. Maybe they don't understand what a Ponzi is?
You seem to be struggling?
Struggling to cope with dumb commenters, yes. Struggling financially, no. I guess that's why it irks me so much. I'm doing okay because my property earns income and one provides a home for me. Ponzis don't generate legitimate income or have any other value.
I'm rich and sorted ....sound like a dumbarse comment to many of us here Zach
Oh sorry, I didn't realize I was on the Socialist Workers of the World website and not one that focused on "helping you make financial decisions. I didn't even say I was rich, just okay, which should be expected after working without a break for 48 years!
Yeah pretty annoying isn't it Zac. I don't think it pays to hang around here once you are successful, the level of envy is suffocating. Perfect timing to leave I think.
Don't overthink it. Everyone knows the Aotearoa housing Ponzi is quite different to when Charles Ponzi discovered an arbitrage opportunity involving international reply coupons for postage stamp. It's more related to Minsky's 'Ponzi Finance' where the greater the weight of speculative and Ponzi finance in an economy, the more likely it is to become a "deviation-amplifying" system, prone to instability. This hypothesis suggests that prolonged periods of prosperity naturally lead to increased financial fragility, as the economy shifts from stable hedge finance to unstable Ponzi finance. Minsky identifies different characteristics of a Ponzi:
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Borrowers depend on continually rising asset prices to refinance their debt
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Cash flows from operations are insufficient to cover interest payments or principal repayment
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The system requires attracting ever-increasing sums of money to survive
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It typically emerges during speculative periods when safety margins have been eliminated
@JC - hahah lots of truths in there - honestly dont do it - you are way to smart -
Those four points don't apply to most landlords. They don't apply across the board which I think is where you get it wrong.
Or where Minsky gets it wrong P. You definitely won't hear about Minsky at your seminars, from Granny, or your mentors like Ashley Church.
Its almost like we dont like good news.
One has to be very wary of taking good news from those with a vested interest on others believing it. Those who aren't get taken advantage of.
This
So it turns out that NZ Big Business Incorporated, after being handed $20 billion of taxpayer money during the pandemic years - and in the case of Air NZ having your entire business underwritten by the government - not to mention having huge monopoly and oligopoly powers - can't make a buck. The question is: could it be our private sector - though not small & medium business owners - and not government employees - but instead the Big NZX 50 companies - is being run by people who are so incompetently useless they can't make a buck even when they have no competition? By contrast, could it be that the only reason NZ is continuing to scrape along is that our teachers, nurses, doctors, social service workers - these folks are rolling up their sleeves and delivering incredible services every day. They have to physically go into work. So could it be the real drag on NZ is the "top" private sector managers, the CEOs and the useless company boardrooms who are (pretending) to work from home. Many of them, by the way, are Members of the NZ Initiative, which has become the Prime Minister and Finance Minister's Chief (Informal) Economic Adviser.
https://www.downtoearth.kiwi/post/is-productivity-low-in-nz-not-because…
EXCELLENT
Corporate Aotearoa is a joke
Public company executive salaries have to come back. They somehow justify them say its competition from overseas companies that are driving it. Well the news is these overseas companies are performing poorly also, with the only person suffering being the poor shareholder.
Executives salaries have been driven up by measures to keep the real workers wages low, and/or exporting manufacturing to lower cost wage economies. These are hardly sustainable long term, and caused the trade imbalances which now exist.
We have to reduce business fixed costs, to get a fair return on capital including goods and services which alot more people can afford. So lets start with lower board and executive salaries. Those good will be rewarded with future shares, which can only be cashed in after five years of receipt...
This should change governance to focus long term, rather than short term profiteering...I'd go as far as to legalise this for public companies, to bring some personal accountability and responsibility into sustainable business management. It should be mandatory for Board members to have skin in the game too; at a level of their renumeration, and have to keep shares for a three year period after the end of their tenure.
One might find it then becomes less of a boys club, and more based on talent and sustainable results..
but instead the Big NZX 50 companies - is being run by people who are so incompetently useless they can't make a buck even when they have no competition?
Had a good chuckle at this!
Any growth will no doubt be on the back of more money loaned into real estate by investors/speculators. Quite who is going to earn the money through production to service the debt and the sad thing is that this $370 billion approx is unrepayable and will be our nations downfall. Leave if you can, and if you can't try and find a way to opt out of the economy robber baron landlords
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