Tony Alexander

Economic Commentaries

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

Economy not on a roll yet

Thursday April 19th 2012

Over the past fortnight we have seen the release of data showing growth in electronic card spending during the March quarter at less than one-third the average pace, falls in dairy prices which now sit one-third below peaks of early last year, but strong growth in dwelling sales and on-line job advertising, plus continuing good levels of business and consumer sentiment regarding the economy. (more…)

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Quiet Week Ahead of Easter

Tuesday April 3rd 2012

 Because of Easter the Weekly Overview is being sent a couple of days early and there will be no issue next week as I shall be on leave. This week we are running our monthly survey so if you can please click on the link below and let us know whether you feel the economy will be in better or worse shape in a years time. And if you have a spare minute let us know how conditions are in your industry remembering to specify what it is. Many thanks to past respondents. The results will be sent out after Easter.


NZ Data Still Not Strong

Thursday March 29th 2012

Data released this week show an economy still not picking up. Exports have fallen 0.6% in the three months to February, jobs growth has slowed to 0.3% from 0.5% three months earlier, and capital goods imports have declined 7%. These are not the numbers one would expect to see if businesses had been acting on their generally good levels of sentiment, investment, and employment intentions in recent months.

Short term NZ growth prospects remain poor, monetary policy is likely on hold until early next year, but the NZD remains well supported by reasonable commodity prices, and once monetary policy tightening starts history tells us which way the NZD will go.

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Economy Barely Grew Late Last Year

Thursday March 22nd 2012

This morning we learnt that during the December quarter the NZ economy grew by only 0.3% and not the 0.6% which the markets had been expecting. Growth for the whole year was only 1.4%. This mediocre result is in line with the downbeat interpretation I have been taking of NZ’s economic performance – especially when one considers that growth was boosted last year by the Rugby World Cup and the terms of trade being near a four decade high.


Very Mixed Data This Week

Thursday March 15th 2012

This week we have learnt that consumers cut their spending in February but employers strongly raised their on-line job advertising. The NZ dollar lost another cent against a resurgent greenback, but wholesale interest rates have risen to their highest levels since November as growth expectations have risen offshore and pushed up US bond yields in particular. We’ve also received data showing dwelling sales 27% ahead of a year ago and further strength in farm sales. But consumer confidence has weakened and during the December quarter manufacturing output fell 0.7% if one strips out milk and meat processing.


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Interest Rates To Stay Steady

Thursday March 8th 2012

This week we released the results of our monthly BNZ Confidence Survey and BNZ-REINZ Residential Market Survey. The former showed a rise in sentiment to a six month high of a net 27% optimistic. The latter showed further evidence of investors starting to follow the wave of first home buyers entering the market with Auckland leading the housing market forward. Good results basically. (more…)

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Housing and Exports OK, Job Situation Poor

Thursday March 1st 2012

The latest data show an upward trend in consents issued for new dwellings, underlying growth in exports, but no growth in employment.

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Quiet Week

Thursday February 23rd 2012

There has been practically nothing new learnt about the state of the NZ economy over the past week, the NZ dollar has not done much, and wholesale interest rates have crept up only slightly. So if you have anything better to do then do it as this week’s tiny issue will not set the world alight.

Mixed Data – Same For The NZD

Thursday February 16th 2012

The Kiwi dollar has eased (probably temporarily) against the greenback this week following the Minister of Finance’s warning today that the government’s accounts may not return to surplus in 2014/15. That is hardly earth-shattering news given global growth risks, but it provided an excuse for NZD selling after buying on the back of yesterday’s much better than expected retail trade numbers, and buying against the British Pound and Euro following ratings changes and warnings from Moodys.


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Labour Market Weak

Thursday February 9th 2012

This week we have released results from our two monthly surveys. The Confidence Survey shows sentiment up marginally to a net 13% positive about the economy over the coming year from just 3% in December – a positive result but hardly stellar. But in addition all eight of the main measures in our BNZ-REINZ Residential Market Survey moved up quite firmly this month. More and more first home buyers are entering the market and investors appear to be stepping up to the plate as well. Agents now perceive sellers to have greater power than buyers and price perceptions have shifted further upward.


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