Tony Alexander

Economic Commentaries

The full pdf version of the Weekly Overview is contained here.

Weekly Overview 22 June 2017

Thursday June 22nd 2017

In this week’s Overview we take a quick look at last week’s numbers on GDP and the current account, note the RB leaving the cash rate unchanged at 1.75% this morning but bank funding costs drifting upward, and look at when turnover and house price inflation peaked in each of the country’s regions.

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Weekly Overview 15 June 2017

Thursday June 15th 2017

This week’s Overview runs to just under 8 pages. We start by discussing National Farm Fieldays and the topic of this year’s 11.00am and 2.00pm talks to farmers in the BNZ tent – the new world of credit rationing in New Zealand. We then discuss the Reserve Bank’s recent paper seeking consultation on a debt to income ratio tool – it will probably be eventually introduced but government are unlikely to be in a hurry to do so as the immediate impact will sap growth by up to 0.5% in the Reserve Bank’s estimation.

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Weekly Overview 8 June 2017

Thursday June 8th 2017

This week’s Overview is short and sweet with an update to calculations made a year or so ago looking at housing shortages around the regions, and some commentary on the strong NZ dollar.

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Weekly Overview 1 June 2017

Thursday June 1st 2017

This week we note how house building has plateaued in Auckland, failure of retailers in spite of strong growth in consumer spending, growth in big versus less big cities, and a strengthening in business plans to hire people and boost capital spending.

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Weekly Overview 25 May 2017

Thursday May 25th 2017

This year’s Budget contains spending increases across numerous areas as the government responds to an accelerated pace of population growth placing increased demands on public services.

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Weekly Overview 18 May 2017

Thursday May 18th 2017

Data this week show housing turnover falling but household retail spending accelerating. We look at the numbers and consider implications for some property prices of an over-supply of sub-dividable sections in Auckland and the role emotion plays in housing cycles.

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Weekly Overview 11 May 2017

Thursday May 11th 2017

The Reserve Bank surprised the markets today not by leaving the cash rate unchanged at 1.75%, but failing to adopt a tightening bias (warning of rate rises) which most expected. That has caused the NZD to fall close to US68 cents but doesn’t change the risk that bank lending rates will continue to edge slowly higher while lending rules get tighter and tighter.

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Weekly Overview 4 May 2017

Thursday May 4th 2017

House building is growing in Auckland but at a very slow pace which will see the existing shortage get worse for the next few years – or decades. But outside Auckland and Canterbury a rapid supply response is occurring. That has implications for prices in locations with low (if any) population growth. The labour market remains very strong and firms which have been struggling to find staff are going to find things even tougher going forward.

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Weekly Overview 27 April 2017

Thursday April 27th 2017

With the week again interrupted by a public holiday the Overview is once more a tad on the light side. All we do is discuss the migration numbers and take a look at the recent small decline in the NZD to just below US69 cents.

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Weekly Overview 20 April 2017

Thursday April 20th 2017

We learnt this morning that the inflation rate has risen to 2.2%. But one key measure of core inflation still sits at just 1.6%. And with the absence of any sign of accelerating growth in wages outside the construction sector, while inflation near to above 2% beckons for a couple of years, the Reserve Bank are likely still to feel they have time on their side. The first official cash rate rise is still more likely toward the middle of next year than this year sometime.

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