Source: New Zealand Institute of Economic Research – Growth expectations softening – Consensus Forecasts, June 2015

Real GDP Growth

The latest NZIER Consensus Forecasts shows forecasters have pared back growth expectations slightly since the March quarter survey. Activity indicators over the past quarter have been mixed, with global dairy prices continuing to fall but household spending remaining strong.

Despite the slightly weaker expectations for the New Zealand economy, growth is still expected to be fairly solid out to 2018. Forecasters expect growth of 3.3% in the March 2015 year, moderating to 2.8% and 2.7% in the following two years. Strong residential construction was a key contributor to GDP growth over 2014, driven by house-building demand in Canterbury and Auckland.

While forecasters have wound back the extent of residential construction growth expected over 2016 and 2017, the level of activity is still expected to be very elevated. A further ramp-up in house-building in Auckland will offset the reduced growth impetus as the Canterbury rebuild nears completion. The labour market is one particularly positive story. Forecasters expect a further strengthening in employment demand to reduce the unemployment rate to close to 5% in 2017.

You can read the full report here (pdf).

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Selwyn Manning, BCS (Hons.) MCS (Hons.) is an investigative political journalist with 23 years media experience. He specializes in reportage and analysis of socioeconomics, politics, foreign affairs, and security/intelligence issues. Selwyn has extensive experience as a commentator and has provided live political analysis to a wide range of television and radio organizations broadcasting in New Zealand, Australia and globally including the BBC (Five Live, London) and BBC (World Service). He is currently a correspondent to Australia's FiveAA radio, and is a regular live-on-air panelist on Radio New Zealand's The Panel with broadcaster Jim Mora.