The New Zealand economy is in fundamental good shape, though growth has proven softer than expected in the early part of 2018. The economy is close to running at full potential and has already maxed out capacity in the building and construction sector. Employment growth has slowed as the labour market has closed in on full employment, and population growth is moderating as net migration slows. The biggest risk to the growth outlook is low business confidence, with mycoplasma bovis a major factor impacting confidence levels and the farming community. But on a brighter note, New Zealand’s merchandise terms of trade remain close to record high levels.

Read more in our latest New Zealand Insights, which includes a fixed income perspective from Warren Potter, Senior Portfolio Manager, and comment on New Zealand equities from Matthew Goodson at Salt Funds Management.