30 Jun 2014
New Zealand GDP growth is peaking about now - BNZ
FXStreet (Łódź) - Stephen Toplis, Head of Research at BNZ, suggests that New Zealand's GDP growth is currently reaching its peak and should be around 1.0% per quarter through June, September and December but then will most probably progressively fade away through 2015.
Key quotes
"Our view of the world was leant greater credence by today’s ANZ business outlook release. The own-activity indicator fell in June for the third consecutive month. At 45.8 it is now 12.4 points below its February peak."
"The timing of the decline fits well with our economic forecasts but we are quick to highlight that the level of this index still remains consistent with GDP growth of around 5.0% - which is well above our own peak pick of 4.3%."
"Of note, the general decline in confidence was also reflected in the trend in profit and investment intentions and employment expectations – though, again, employment intentions remain ahead of the economy’s current ability to provide sufficient labour supply."
"While we are sticking to our view that inflationary pressures remain on the rise, we have to acknowledge that the price indicators in today’s survey were benign. Pricing intentions fell and so too did inflation expectations."
"The RBNZ will be overjoyed to see this – particularly given that this trend has been in place for several months now. We also find it interesting that it is not only agriculture which now has pricing intentions below average but also retail and manufacturing, the sales of which will have a strong bearing on the CPI."
"On the pricing front, construction stands out like the proverbial in terms of inflation risks. To the extent that this reflects relative price pressures in a sector that will continue to grow more strongly than others this is no big deal but if such inflation pressures spill over elsewhere it will become problematic."
Key quotes
"Our view of the world was leant greater credence by today’s ANZ business outlook release. The own-activity indicator fell in June for the third consecutive month. At 45.8 it is now 12.4 points below its February peak."
"The timing of the decline fits well with our economic forecasts but we are quick to highlight that the level of this index still remains consistent with GDP growth of around 5.0% - which is well above our own peak pick of 4.3%."
"Of note, the general decline in confidence was also reflected in the trend in profit and investment intentions and employment expectations – though, again, employment intentions remain ahead of the economy’s current ability to provide sufficient labour supply."
"While we are sticking to our view that inflationary pressures remain on the rise, we have to acknowledge that the price indicators in today’s survey were benign. Pricing intentions fell and so too did inflation expectations."
"The RBNZ will be overjoyed to see this – particularly given that this trend has been in place for several months now. We also find it interesting that it is not only agriculture which now has pricing intentions below average but also retail and manufacturing, the sales of which will have a strong bearing on the CPI."
"On the pricing front, construction stands out like the proverbial in terms of inflation risks. To the extent that this reflects relative price pressures in a sector that will continue to grow more strongly than others this is no big deal but if such inflation pressures spill over elsewhere it will become problematic."