Subdued, uncertain economy

Official and unofficial data show a subdued New Zealand economy.

The BusinessNZ Planning Forecast, based on numerous current economic indicators, shows New Zealand’s economic activity is more or less stagnant, without strong evidence of either growth or decline.

The global economic growth outlook is subdued, with reduced demand likely to impact on New Zealand, although drought in the US may increase grain and beef prices to the advantage of New Zealand meat producers.  And although recent dairy trade auction results have been buoyant, future projections for dairy are muted.

Despite growth associated with the Christchurch rebuild and the housing upturn in Auckland, these pockets of optimism are not being reflected in aggregate employment or output growth.

“For now, uncertainty is the new certainty,” said BusinessNZ economist John Pask.

The BusinessNZ Planning Forecast incorporates BusinessNZ’s Economic Conditions Index (ECI) which tracks 33 indicators, including GDP, export volumes, commodity prices and inflation, debt and confidence figures.

The ECI sits at -2 for the September quarter, the same as the previous quarter and with little change from a year ago.

The BusinessNZ Planning Forecast for the September 2012 quarter is here on www.businessnz.org.nz