NZ: Economic indicators suggest growth remained solid in Q3 - Westpac

Research Team at Westpac, notes that the NZ’s business confidence held steady in August and the underlying activity metrics ticked up, suggesting that growth remained solid in Q3 following 0.9% growth in both Q1 and Q2.

Key Quotes

“Confidence in the beleaguered agricultural sector perked up in August off the back of strong gains in dairy prices. This improvement in confidence should have further to run, reflecting additional price gains and an upgrade to Fonterra’s milk price forecast for 2016/17.

Despite solid growth, inflation pressures outside of housing and construction have been subdued. In August, the survey’s two inflation gauges fell, with firms’ pricing intentions hitting a four-year low. Further weakness in inflation indicators will increase the Reserve Bank’s angst about returning inflation to 2% in a timely fashion.”