InvestNow News 5th July – AMP Capital – New Zealand Insights June 2019
Growth still subdued…
The New Zealand economy continues to expand at a subdued pace, at least when compared to recent history. Growth is currently running at around an average 0.5% per quarter, or an annualised pace of 2%.
The most recent data for the March 2019 quarter showed the economy expanding at 0.6% in the quarter and 2.5% for the year. That was better than expected on both counts, though the detail of the result was more mixed. The annual rate is still supported by a healthy 0.9% increase in the June quarter of 2018, the next number to drop out of the annual calculations. This is most likely to be replaced by a somewhat lower number (our current pick 0.7%) in June of this year.
A number of factors have contributed to the slowdown. Consumer spending has slowed as the heat came out of the residential property market. That was then joined by softer business confidence, a reflection of grumpiness about rising business costs, including increases in the minimum wage, and concern about other policy changes, especially ahead of the decision around whether to progress a broad-based capital gains tax.