NZ Economy: Slow Grind

The BusinessNZ Planning Forecast for the June quarter reveals that any growth the economy sees will be subdued for some time to come, as both business and consumer confidence continues to drop.

BusinessNZ Director of Advocacy Catherine Beard says that forecasting out to 2026 shows things may initially get worse before improving slowly.

"Currently transactions are down compared to the previous quarter, building consent numbers and freight movements are low too. Consumers are spending less, and confidence continues to suffer with the likelihood that interest rates will remain at elevated levels for longer than anticipated.

Beard says there is light at the end of the tunnel for businesses that can make it through a slow 18 months or so.

"On a brighter note, inflation continues to creep closer toward the Reserve Bank’s targeted three percent threshold, and high levels of net migration is taking heat out of our labour market. The price of dairy is improving and oil prices are trending down, which should all positively impact our economy - over time."

The BusinessNZ Economic Conditions Index sits at 3 for the June 2024 quarter, the same as the previous quarter and an improvement of 4 on a year ago. The index is a measure of New Zealand’s major economic indicators including GDP, export volumes, commodity prices, inflation, debt, and business and consumer confidence.

The full Planning Forecast can be found on the BusinessNZ website now.

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