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Economic research & market strategy

Weekly Commentary

Weekly coverage of recent and upcoming economic and market events.

Weekly Forex and Interest Rate Outlook

Weekly coverage of rates and key themes influencing currency and interest rates.

 

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Economic Data Reports

Previews and reviews of the latest economic data releases.

Back to square one - NZ Consumer Price Index review, Q3 2014 - 16 October 2014
The rise in annual inflation that gave the green light for this year's OCR hikes has now largely dissipated. The RBNZ will want to see more tangible evidence of a pickup in inflation pressures before acting again; on our inflation forecasts that won't be until September 2015.

Stand down - RBNZ October 2014 OCR Preview - 16 October 2014
Inflation is likely to remain low for quite some time. Consequently, we now expect the RBNZ will leave the OCR unchanged at 3.5% until September 2015. Next week's OCR preview will express a similar sentiment - the OCR is set to remain on hold for the foreseeable future.

Taking a step back - NZ Consumer Price Index preview, Q3 2014 - 16 October 2014
We expect annual inflation to slow to 1.1% in the September quarter, reflecting smaller increases in food and fuel prices compared to a year ago. The story remains one of subdued domestic inflation pressures and a still-high NZ dollar dampening tradables prices.

Fortnightly Agri Update - 16 October 2014
The latest developments in New Zealand's agri markets.

Home Truths: Westpac's monthly commentary on the NZ housing market - 13 October 2014
A fresh perspective on the New Zealand housing market.

NZ Local Knowledge, October 2014 - 9 October 2014
Monthly indicators suggest that the economy continues to grow at a solid clip, though off the pace of late 2013 and early 2014.

Easing back - NZ Quarterly Survey of Business Opinion, September 2014 - 7 October 2014
The September Quarterly Survey of Business Opinion suggests that while the economy is continuing to grow at a healthy pace, the rate of growth has taken a step down since early 2014.

NZ Employment Confidence Index, Q2 2014 - Tortoise meets hare - 6 October 2014
New Zealanders saw a further improvement in labour market conditions over the September quarter, even amidst signs that the economy's momentum has passed its peak.

Fortnightly Agri Update - 2 October 2014
The latest developments in New Zealand's agri markets.

Westpac McDermott Miller Regional Economic Confidence, September 2014 - Confidence fades in most regions - 29 September 2014
Regional Economic Confidence continued to fade in the September quarter, but remains in positive territory. Falling dairy prices, rising interest rates and more mixed economic news are all likely to have played a role in the decline in confidence. Economic confidence improved in only two regions this quarter, the Bay of Plenty and Nelson/Marlborough/West Coast. In three regions, confidence has fallen into pessimistic territory. Canterbury remains the most optimistic region in New Zealand for the 9th consecutive quarter.

From a boil to a simmer - NZ Consumer Confidence, Q3 2014 - 22 September 2014
Consumer confidence fell to 116.7 in the September quarter, but remains elevated by historical standards. There has been a notable deterioration in consumer’s view of the economic outlook over the year ahead, but little change to their longer term view. Elsewhere, there were widespread modest declines in other key measures of confidence, consistent with a slower pace of growth in the economy over recent months.

NZ GDP review, Q2 2014 - Cruising speed - 18 September 2014
The New Zealand economy's upturn slowed in the June quarter, but only to a more sustainable pace. And while global conditions have made life harder for exporters, the domestic economy is still powering ahead.

NZ current account review, Q2 2014 - The best of times - 17 September 2014
The annual current account deficit narrowed further to 2.5% of GDP as expected. But on a quarterly basis the tide has already turned, and falling commodity prices will see the deficit widen again over the next year.

Fortnightly Agri Update - 17 September 2014
The latest developments in New Zealand's agri markets.

Home Truths: Westpac's monthly analysis of the New Zealand housing market - 16 September 2014
This month Home Truths takes a closer look at the housing market, casting doubt on the popular perception that the market is slowing.

RBNZ Monetary Policy Statement, September 2014 - A change of mood - 11 September 2014
While the economy remains in good form, the RBNZ has altered its judgements around how this will translate into inflation pressures, in light of recent weak inflation outturns. Consequently, the message on interest rates is low for longer, but still up over time.

NZ GDP and Current Account preview, Q2 2014 - Foot off the accelerator - 10 September 2014
We estimate that the New Zealand economy grew by 0.7% in the June quarter, a slowdown from above-trend to around-trend growth. While conditions got tougher for the export sectors, they still fared better than during last year's drought, a condition that also points to a narrowing in the current account deficit.

Building up, not out - NZ building activity survey, Q2 2014 - 3 September 2014
The rise in June quarter building activity was modest but proved that the record increase in the March quarter wasn't a fluke. The post-quake rebuild in Canterbury remains the biggest driver, as it moves into a new phase.

Fortnightly Agri Update - 3 September 2014
The latest developments in New Zealand's agri markets.

NZ Local Knowledge - 2 September 2014
A monthly review of key activity indicators for the New Zealand economy.

RBNZ September 2014 MPS Preview - Kicking the can down the road - 2 September 2014
The RBNZ will probably continue with its current "pause" phase for the OCR, but it will also reiterate its overarching expectation that the OCR will rise to more normal levels over the years ahead. However, with an election looming just nine days after this MPS, the RBNZ is likely to take a softly-softly approach in its communications.

One last hurrah - NZ Terms of Trade, Q2 2014 - 1 September 2014
The sharp drop in export prices this year is starting to show through in the terms of trade, although the June quarter figures were salvaged by an even larger fall in import prices.

Fortnightly Agri Update - 20 August 2014
The latest developments in New Zealand's agri markets.

NZ Pre-Election Fiscal and Economic Update - Slim Pickings - 19 August 2014
Treasury’s latest update of its fiscal and economic forecasts contained few surprises.  Slight downgrades to revenue projections mean the Treasury is now expecting smaller surpluses in 2014/15 and beyond, giving any future Governments less wriggle room for new spending plans. While we agree with the broad thrust of Treasury’s economic forecasts, we anticipate an economic cycle of greater amplitude.

Mid-year cheer - NZ Retail sales review, Q2 2014 - 14 August 2014
Retail sales growth picked up the pace again in the June quarter, rising 1.2%.The rebound was stronger than expected, and matches other evidence that the consumer sector has perked up again after a slow start to the year. For the Reserve Bank, this reinforces the medium-term case for more OCR hikes, but is unlikely to cause it to rethink its current ‘on pause’ mode.

Home Truths: Westpac's monthly analysis of the New Zealand housing market - 14 August 2014
This month Home Truths recaps why we expect the housing market to stage a brief resurgence this year before a more pervasive downturn ensues.

Warming up - NZ labour market review, Q2 2014 - 6 August 2014
The upswing in the New Zealand economy has continued to chip away at the unemployment rate, which fell to a five-year low of 5.6% in the June quarter. However, the latest figures also cast some doubt on the economy's capacity to grow without rising inflation.

Fortnightly Agri Update - 6 August 2014
The latest developments in New Zealand's agri markets.

NZ Local Knowledge - 6 August 2014
A monthly review of key activity indicators for the New Zealand economy.

On the job - NZ labour market preview, Q2 2014 - 30 July 2014
We expect a continuation of the recent strong jobs growth over the June quarter. But against a backdrop of high labour force participation and low inflation outturns, we expect wage pressures to remain subdued.

RBNZ OCR Review, July 2014 - The tortoise versus the hare - 24 July 2014
As expected, the RBNZ raised the cash rate for a fourth time to 3.50%, and signalled a pause to assess the impact of the hikes to date. We expect this pause to last until next January. An extended pause will be a challenge from a communication point of view; we suspect that markets will overreact to this signal, which could lead to an unintended drop in mortgage rates.

RBNZ July 2014 OCR Preview - Cat among the pigeons - 17 July 2014
Recent weak data has created some uncertainty about the New Zealand OCR outlook. However, we believe the RBNZ will persist with its planned 25 basis point hike at next week's OCR Review. The accompanying press release will reiterate the RBNZ's broad plan to lift the OCR substantially over the coming two years. However, the RBNZ will probably also announce a brief pause in the hiking cycle beyond July. We now expect the pause will last until January 2015.

Food for thought  - NZ Consumer Price Index review, Q2 2014 - 16 July 2014
On balance today's inflation report represents a small downside surprise to the Reserve Bank. Taken in combination with recent signs that domestic economic growth is slowing, tumbling dairy and log prices, and the stubbornly high exchange rate, the Reserve Bank is probably reconsidering how many OCR hikes will be necessary over the next two years. We will write more on the Reserve Bank’s reaction to this run of weak data later this week.

Fortnightly Agri Update - 16 July 2014
The latest developments in New Zealand's agri markets.

Home Truths: Westpac's monthly analysis of the New Zealand housing market - 15 July 2014
We can finally confirm the notion that the NZ housing market is going through a modest recovery at present. However, we believe this market revival will be short-lived.

Approaching target - NZ Consumer Price Index preview, Q2 2014 - 10 July 2014
We expect annual inflation to rise to 1.8% in the June quarter, which would be the highest since December 2011. With the economy now running at above-trend growth, the Reserve Bank will be alert to any signs that inflation pressures are becoming more widespread.

End of the golden weather - NZ Quarterly Survey of Business Opinion, Q2 2014 - 8 July 2014
New Zealand's economic upturn is starting to look more mature, with conditions for growth remaining positive but past their best. Meanwhile, the long-expected reawakening of  inflation pressures is becoming more of a reality.

NZ Local Knowledge - 4 July 2014
A monthly review of key activity indicators for the New Zealand economy.

Fortnightly Agri Update - 2 July 2014
The latest developments in New Zealand's agri markets.

Hot in the city - NZ Employment Confidence Index, Q2 2014 - 30 June 2014
Households' perceptions of the labour market continued to improve in the June quarter, with jobs becoming less difficult to find.

Economic confidence declines in most regions - NZ Regional Economic Confidence, Q2 2014 - 24 June 2014
Regional economic confidence remains in optimistic territory throughout New Zealand. However the degree of optimism has faded in most regions.

Mr Consistency - NZ GDP review, Q1 2014 - 19 June 2014
The New Zealand economy grew by 1% in the March quarter, more or less the same pace as in the previous two quarters. Continued above-trend growth reinforces the Reserve Bank's decision to start returning interest rates to more normal levels.

Good news all around - NZ current account review, Q1 2014 - 18 June 2014
Strong export volumes and record prices helped to narrow the current account deficit to 2.8% of GDP in the year to March, as expected.

Fortnightly Agri Update - 18 June 2014
The latest developments in New Zealand's agri markets.

Home Truths: Westpac's monthly analysis of the New Zealand housing market - 16 June 2014
House price inflation is slowing, though the latest figures provide mixed messages as to how much. But they are clearly inconsistent with migration flows being the dominant driver of housing demand.

Unbowed - NZ Consumer Confidence, Q2 2014 - 16 June 2014
Consumer confidence has edged lower, but remains near nine-year highs. While there was a drop in economic optimism, the survey showed little impact so far of rising interest rates.

Now for the tough choices - RBNZ Monetary Policy Statement - 12 June 2014
The RBNZ raised the cash rate to 3.25% today, and largely reiterated the path for interest rates that it laid out in March. We expect a fourth consecutive OCR hike at the July review. But with 75bp of tightening already under the RBNZ's belt, each subsequent decision becomes more data-dependent.

Better and better - NZ GDP and Current Account preview, Q1 2014 - 11 June 2014
Our long-running themes of surging construction activity and improved export performance were in full force in the March quarter, driving an expected 1.2% rise in GDP and a narrowing of the current account deficit to 2.8% of GDP.

NZ Local Knowledge - 10 June 2014
A monthly review of key activity indicators for the New Zealand economy.

Herding cats - RBNZ Monetary Policy Statement Preview - 5 June 2014
We expect another 25 basis point hike in the OCR to 3.25% next week. Developments since March will have prompted the Reserve Bank to trim its interest rate projections a little, but by nowhere near as much as market pricing has pulled back in recent weeks.

Everything is awesome - NZ building activity survey, Q1 2014 - 4 June 2014
Building activity surged 16% over the March quarter, a much stronger than expected catch-up after some surprisingly flat outturns over 2013. The post-quake rebuild in Canterbury continues to power ahead, and housing construction has also risen strongly in Auckland. We'll update our Q1 GDP forecast next week, but today's release presents a substantial upside risk to our forecast of 1.1% growth.

Fortnightly Agri Update - 4 June 2014
The latest developments in New Zealand's agri markets.

High tide mark - NZ Terms of Trade, Q1 2014 - 3 June 2014
The terms of trade rose further in the March quarter, to reach its highest level in more than 40 years.

Fortnightly Agri Update - 21 May 2014
The latest developments in New Zealand's agri markets.

NZ Budget 2014: Loosening the purse strings - 15 May 2014
Comprehensive coverage of the New Zealand Government's Budget 2014.

First Impressions: Budget 2014 - A loosening of the purse strings - 15 May 2014
The highlight of Budget 2014 was a notable increase in the spending allowance compared to recent years. The Government remains on track for a surplus in 2015 but projected surpluses in following years are substantially smaller. The projected spending changes are not significant enough to alter our growth or interest rate forecasts.

No longer in the driver's seat - NZ retail sales, Q1 2014 - 14 May 2014
Retail sales growth slowed more than expected in the March quarter, to 0.7%. On its own this suggests modest downside risk to our forecast for 1.1% GDP growth. More broadly, the data support our view that consumer spending is becoming less of a tailwind for economic growth, as interest rates rise and the housing market slows.

Home Truths: Westpac's monthly analysis of the New Zealand housing market - 14 May 2014
We now have clarity on house prices and the RBNZ's LVR restrictions. But the state of market turnover is less clear.

Lucky Dip - NZ 2014 Budget Preview, May 2014 - 12 May 2014
Finance Minister Bill English is likely repeat familiar cautious rhetoric when he unveils the 2014 Budget on Thursday. An upgrade to GDP growth forecasts should see the Government’s books looking in better shape than at the December update. This should leave room for both maintaining fiscal discipline and funding modest new spending initiatives beyond 2015.

Change of RBNZ call - 8 May 2014
We now expect the RBNZ will leave the OCR on hold in July, and will instead hike in September.

Worker uprising - NZ labour market review, Q1 2014 - 7 May 2014
New Zealand's economic upswing generated another quarter of strong jobs growth, but also a further lift to record levels of labour force participation. That's meant a less capacity-constrained economy than we might have expected, but it's also acted to suppress wage growth.

Fortnightly Agri Update - 7 May 2014
The latest developments in New Zealand's agri markets.

Help wanted - NZ labour market preview, Q1 2014 - 1 May 2014
Employers are now firmly in expansion mode as the economy picks up momentum. We're expecting the March quarter unemployment rate to drop to 5.8%, which would be a five-year low. Wage growth may also tick higher again, though not dramatically so given that annual inflation remains subdued.

Credit Check - 1 May 2014
This Credit Check takes a look at how the RBNZ's high-LVR lending restrictions have been performing, and how they might evolve from here.

Sensibly modest - NZ Labour Party monetary policy proposals - 29 April 2014
We provide our first thoughts on the Labour Party's proposed changes to New Zealand's monetary policy regime.

Variations on a theme: April 2014 OCR Review - 24 April 2014
As expected, the Reserve Bank lifted the OCR from 2.75% to 3.00%, reiterated that further hikes lie ahead, but mentioned the uncomfortably high exchange rate.

Easter, but no surprise: RBNZ OCR Review, April 2014 - 17 April 2014
We expect the Reserve Bank will lift the OCR from 2.75% to 3.00% and will signal more to come. But the tone will be more cautious than the March MPS.

Zig-zag - NZ Consumer Price Index review, Q1 2014 - 16 April 2014
The annual inflation rate flipped lower in the March quarter after two straight increases. Our view remains that inflation will head gradually higher over the next couple of years, but lower inflation today, combined with a higher NZD and lower dairy prices, will reduce the degree of urgency for OCR hikes.

Fortnightly Agri Update - 16 April 2014
The latest developments in New Zealand's agri markets.

Home Truths: Westpac's monthly analysis of the New Zealand housing market - 14 April 2014
While different measures of house prices are telling radically different stories, the true trend is elusive.

More of the same - NZ Consumer Price Index preview, Q1 2014 - 10 April 2014
We expect annual inflation to hold at 1.6% for the March quarter, with prices creeping up across a wide range of categories but slowing for food. Our estimate is a touch below the Reserve Bank's forecast, but not enough to alter the near-term outlook for interest rates.

Power shift - NZ Quarterly Survey of Business Opinion, Q1 2014 - 8 April 2014
Businesses remain at their most upbeat in decades, with that confidence now extending to an expectation that firms will be able to lift their prices and margins in coming months. The question is whether they will be able to do so; reported price increases to date have been more modest and the high NZ dollar remains a headwind.

Fortnightly Agri Update - 2 April 2014
The latest developments in New Zealand's agri markets.

That's more like it - NZ Employment Confidence Index, Q1 2014 - 31 March 2014
After a substantial delay, the labour market now is joining in the economy's general upturn. Households' perceptions of the labour market are now at their strongest since 2008, though they remain markedly weaker than they were before the recession.

Where should we build now? Housing supply and the construction outlook in regions of New Zealand - 26 March 2014
By calculating the number of people per house in regions of New Zealand, we gain insights into the likely trajectory and locus of construction activity in New Zealand ex Canterbury.

The bright side of life - NZ Regional Confidence, Q1 2014 - 24 March 2014
Economic confidence in Canterbury remains the highest in the country with confidence falling in just two regions. And with economy continuing to strengthen, optimists now outnumber pessimists in all regions for the first time since late 2009. There were sharp improvements in confidence in Otago and Northland this quarter, while confidence remains high in regions where the dairy industry plays an important role.

No alarms and no surprises - NZ GDP review, Q4 2013 - 20 March 2014
The 0.9% rise in December quarter GDP was bang in line with expectations. Stripping out the impact of the drought and the subsequent rebound, the New Zealand economy was consistently growing at an above-trend pace over 2013, reinforcing the case for interest rates to return to more normal levels.

Hey big earner - NZ current account review, Q4 2013 - 19 March 2014
New Zealand received a sharp boost in export income over the December 2013 quarter, with volumes rebounding from drought-depressed levels and prices remaining very high. The current account deficit remains benign for now but is expected to widen again from late 2014 as demand for imports grows.

Fortnightly Agri Update - 19 March 2014
The latest developments in New Zealand's agri markets.

Riding on the coattails - NZ Consumer Confidence, Q1 2014 - 17 March 2014
Consumer confidence has risen to its highest level since 2005, on the back of economic optimism near record levels. Consumers’ sentiment about their own finances is also improving, as is their willingness to spend, though both are still well below previous cycle highs.

Better times - NZ GDP and Current Account preview, Q4 2013 - 14 March 2014
We anticipate more strong numbers to round out the 2013 year, with the effects of the short but severe drought in early 2013 finally washing out of the national accounts figures.

The first of many: RBNZ Monetary Policy Statement - 13 March 2014
The Reserve Bank lifted the OCR from 2.5% to 2.75%, and signalled more to come.

Home Truths: Westpac's monthly analysis of the New Zealand housing market - 11 March 2014
Further evidence that the housing market is slowing in the face of higher interest rates and the RBNZ's restrictions on high-LVR mortgage lending.

This is it - RBNZ Monetary Policy Statement Preview - 6 March 2014
The Reserve Bank is widely expected to lift the OCR by 25bp to 2.75% next Thursday, as it starts to head off the inflation pressures generated by the strengthening economy and the Canterbury rebuild. While the RBNZ doesn't appear to be in danger of falling behind the curve, its economic projections won’t leave much room for dallying. We expect the statement to signal that follow-up hikes over the next few OCR review dates are highly likely.

Down tools - NZ building activity survey, Q4 2013 - 5 March 2014
The volume of building work put in place fell 1% in the December quarter, with a smaller than expected lift in housing construction failing to offset an expected drop in non-residential work. The post-quake rebuild in Canterbury is progressing, and housing construction is picking up in Auckland, but the trend elsewhere remains subdued. While some of the shortfall in today's survey is more likely to be a timing issue than anything fundamental, we have revised down our estimate of December quarter GDP growth from 1.1% to 0.9%.

Fortnightly Agri Update - 5 March 2014
The latest developments in New Zealand's agri markets.

Reach for the stars - NZ Terms of Trade Review, Q4 2013 - 3 March 2014
NZ’s terms of trade remain at a 40 year high after rising further in the December quarter. Export prices are lingering at high levels, with the added boost to the terms of trade in the December quarter largely due to softer import prices. Today's data also showed a big jump in export volumes, largely reflecting stronger dairy exports as the sector rebounded from the effects of last summer’s drought.We think the terms of trade will moderate over the course of 2014, but remain bullish about the outlook for New Zealand’s terms of trade over a medium term horizon.

Home Truths: Westpac's monthly analysis of the New Zealand housing market - 20 February 2014
The housing market is now firmly in slowdown mode.

Fortnightly Agri Update - 19 February 2014
The latest developments in New Zealand's agri markets.

Solid but not spectacular - NZ Retail Sales Review, Q4 2013 - 17 February 2014
Retail sales rebounded less strongly than expected in the September quarter, suggesting some donwside risk to our forecast for a 1.1% lift in GDP in the quarter. The details showed decent momentum in discretionary spending, but slower housing-related spending. A strong NZ dollar may also have hit turnover for some local retailers.

Pitching in - NZ labour market review, Q4 2013 - 5 February 2014
New Zealand's unemployment rate continued to fall in the December 2013 quarter, with employment growing strongly and labour force participation reaching near-record highs. However, the details weren't emphatically positive; weakness in hours worked suggests some downside risk to near-term GDP, and wage growth remains subdued.

Fortnightly Agri Update - 5 February 2014
The latest developments in New Zealand's agri markets.

Steady progress - NZ labour market preview, Q4 2013 - 31 January 2014
Labour market indicators point to a modest fall in the unemployment rate to 6.1% in the December 2013 quarter. It's not unusual for the labour market – and particularly wages – to remain subdued even at this stage of an economic upturn, but we expect a more substantial improvement to emerge over the course of this year.

Steady hand: RBNZ OCR Review - 30 January 2014
As expected the RBNZ to left the OCR at 2.5% and clearly signalled its intention to hike in March. This portrays a central bank that is calmly preparing for a steady OCR hiking cycle.

Curtain raiser: Preview of RBNZ OCR Review - 23 January 2014
We expect the RBNZ to leave the OCR at 2.5%, and to clearly signal its intention to hike in March.

Fortnightly Agri Update - 22 January 2014
The latest developments in New Zealand's agri markets.

Cat among the pigeons - NZ Consumer Price Index review, Q4 2013 - 21 January 2014
Consumer prices recorded a surprise increase in the December 2013 quarter, lifting annual inflation to 1.6%. A strengthening economy, a buoyant housing market and rising construction costs will push the Reserve Bank into raising interest rates this year.

Home Truths: Westpac's monthly analysis of the New Zealand housing market - 21 January 2014
There is no doubt about it. The New Zealand housing market is slowing.

Measured progress - NZ Employment Confidence Index, Q4 2013 - 20 January 2014
Households' perceptions of the labour market improved in the December quarter, although the availability of jobs remains well below par. Expectations of future earnings growth have further subsided, which may be a legacy over low inflation over the last year.

Waiting in the wings - NZ Consumer Price Index preview, Q4 2013 - 16 January 2014
Lower fuel prices and a strong New Zealand dollar helped to restrain inflation to an estimated 1.4% in the year to December. Home-grown inflation pressures are picking up as the economy accelerates, but in the absence of a substantial upside surprise in next week's CPI figures, we expect that the Reserve Bank will be able to carry through with its signalled intention to start raising rates in March.

The next step - NZ Quarterly Survey of Business Opinion, Q4 2013 - 14 January 2014
Business sentiment has risen sharply over the last year, and with demand picking up, firms' expansion plans are the strongest in two decades. Home-grown inflation pressures are likely to follow in time, justifying the Reserve Bank's plan to begin raising interest rates early this year.

Firing on (almost) all cylinders - NZ GDP review, Q3 2013 - 19 December 2013
A rapid post-drought rebound and continued underlying momentum saw the New Zealand economy grow by 1.4% over the September quarter. These figures reinforce the Reserve Bank's message that low interest rates are becoming unnecessary; we now expect five OCR hikes over 2014.

Rewriting history - NZ current account review, Q3 2013 - 18 December 2013
As expected, the current account deficit widened in the year to September due to a strong burst in imports. Improved measurements have narrowed the reported deficit going back several decades - while New Zealand still faces a persistent deficit, it is no longer the international outlier that was once believed.

Fortnightly Agri Update - 18 December 2013
The latest developments in New Zealand's agri markets.

North To South - NZ Regional Economic Confidence, Q4 2013 - 18 December 2013
Economic confidence remains highest in Canterbury and dairy producing regions, but has also picked up strongly in Auckland.

Ship shape - NZ Half-Year Fiscal and Economic Update 2013 - 17 December 2013
Today's HYEFU confirmed that the strengthening New Zealand economy has improved the Government's fiscal position and reduced its need to borrow. The improvement was much greater than the tiny increase in the forecast budget surplus for 2014/15 would suggest, and while the Government has remained cautious with its spending plans for now, it should be in a position to offer up a little more in the run-up to next year's election.

Happy Days - Westpac McDermott Miller Consumer Confidence, December 2013 - 16 December 2013
Consumer confidence has risen to its highest level since September 2009.

Home Truths: Westpac's monthly analysis of the New Zealand housing market - 13 December 2013
The market slowdown has begun, right on cue.

Necessary measures: RBNZ Monetary Policy Statement, Dec 2013 - 12 December 2013
The RBNZ has reiterated its intention to hike the OCR next year - probably starting in March.

A change of pace - NZ GDP and current account preview, Q3 2013 - 11 December 2013
GDP growth accelerated in the September quarter as the agricultural sector recovered from drought, while the current account deficit widened due to a temporary surge in imports. Revisions to the history of both series will paint a more flattering picture of the New Zealand economy, with faster measured GDP growth in the last few years and a permanent improvement in the international trade position.

New Zealand MPS Preview, December 2013 - Straight bat - 5 December 2013
We expect the RBNZ to repeat its message that the OCR is going up, but not until around April next year. This would surprise markets, which are flirting with the idea of a January hike.

Post-quake rebuild surges ahead - NZ building activity survey, Q3 2013 - 4 December 2013
The volume of building work put in place rose 1.4% in the September quarter, with housing construction racing ahead but non-residential building work surprisingly weak. While growth in the construction sector was solid on its own terms, it was less than the 6% rise that we expected, removing the upside risk that we saw lurking around our already-strong forecast of 1.4% growth in September quarter GDP.

Fortnightly Agri Update - 4 December 2013
The latest developments in New Zealand's agri markets.

Bursting higher - NZ terms of trade review, Q3 2013 - 2 December 2013
New Zealand’s terms of trade jumped 7.5% in the September quarter, hitting a new 40 year high. Export prices have gone from strength to strength. Although dairy remains the stand-out performer, prices for a broad range of other commodity exports have also firmed. The terms of trade could edge a little higher from here, but won’t remain this high indefinitely.

Credit Check - 29 November 2013
A monthly analysis of New Zealand borrowing trends.

The benefits of hindsight: Revisions to boost NZ GDP and current account - 27 November 2013
The releases for September quarter national accounts (18-19 December) will include revisions to history that will portray the New Zealand economy in a slightly more flattering light, with a higher level of GDP, a smaller current account deficit, and a better savings track record.

Fortnightly Agri Update - 20 November 2013
The latest developments in New Zealand's agri markets.

Payback - NZ Retail Sales review, Q3 2013 - 14 November 2013
Retail sales slowed unexpectedly sharply in the September quarter. This may simply be payback for an equally surprising surge in June. The balance of evidence suggests continued solid momentum in consumer spending - but not as spectacular as June's retail trade report might have led to believe.

Home Truths: Westpac's monthly analysis of the New Zealand housing market - 12 November 2013
Two months ago we predicted that the housing market would slow from November. Today's housing data relates to October, and did show a few straws in the wind.

Two out of three ain't bad - NZ labour market review, Q3 2013 - 6 November 2013
Strong jobs growth and falling unemployment provide more evidence that the New Zealand economy has entered a sustained upswing. But with wage growth still subdued, there's little reason to think that the RBNZ is falling behind the curve on inflation pressures. We continue to expect the first OCR hike in April 2014.

Fortnightly Agri Update - 6 November 2013
The latest developments in New Zealand's agri markets.

Back to work - NZ labour market preview, Q3 2013 - 4 November 2013
Wednesday's trifecta of surveys is expected to show a further modest improvement in labour market conditions over the September quarter, with the unemployment rate falling to 6.1% and annual wage inflation ticking up to 1.8%.

Credit Check - 1 November 2013
A monthly analysis of New Zealand borrowing trends.

New Zealand OCR Review, October 2013 - A fickle master - 31 October 2013
The RBNZ is still on track to hike the OCR next year, but has introduced the exchange rate as an additional factor that could affect the timing and magnitude of the hiking cycle.

NZ October OCR preview - A question of tactics - 23 October 2013
Preview of the Reserve Bank of New Zealand's October OCR, due to be released on Thursday 31 October at 9:00am NZST.

New Zealand's neutral OCR: a moving feast - 22 October 2013
The neutral OCR will be a crucial determinant of the peak of the upcoming OCR hiking cycle. Neutral may be around 4.5% today, but there are strong reasons to expect it will rise over the coming few years. This short bulletin explains why we think neutral will reach 5%.

Eye on the horizon - longer-term economic forecasts for New Zealand - 17 October 2013
We are often asked for our longer-term economic forecasts. In this bulletin we respond to those requests by extending our forecasts out to 2023. We begin by briefly describing how we expect the current cycle to play out. We then outline our key longer-term assumptions.

Twice the price - NZ Consumer Price Index review, Q3 2013 - 16 October 2013
Consumer prices rose 1.4% in the year to September, as housing-related costs picked up and the downdraft from the high NZ dollar faded. This outturn was higher than the RBNZ's forecast, and will reinforce its case for OCR hikes from next year.

Fortnightly Agri Update - 16 October 2013
The latest developments in New Zealand's agri markets.

Home Truths: Westpac's monthly analysis of the New Zealand housing market - 14 October 2013
The market remained as strong as ever in September, although the regional profile is changing a little. We are calling for a market slowdown, but we don't expect it will kick in until November.

Back on track - NZ Consumer Price Index preview, Q3 2013 - 11 October 2013
Annual inflation is set to rise back within the 1-3% target band for the first time in more than a year, giving the RBNZ more confidence in its message that interest rates will need to rise from next year.

Another step forward - NZ Quarterly Survey of Business Opinion, Q3 2013 - 8 October 2013
Business sentiment improved further in September, reinforcing the sense that the NZ economy has entered a sustainable upturn. While the evidence of inflation to date remains muted, capacity constraints are gradually becoming more of a concern.

Fortnightly Agri Update - 2 October 2013
The latest developments in New Zealand's agri markets.

Credit Check - 30 September 2013
A monthly analysis of New Zealand borrowing trends.

From the outside looking in - NZ Westpac McDermott Miller Employment Confidence Index, Q3 2013 - 30 September 2013
Households' employment confidence waned slightly in September, after four straight quarters of improvement. Earnings for existing workers are rising, but opportunities for jobseekers are still seen as slim.

Sleeping beauty is awake - an update on the NZ tourism sector - 24 September 2013
A review of the recent history and near-term prospects of New Zealand's tourism industry.

North To South - Regional Economic Confidence, Q3 2013 - 23 September 2013
Households' economic confidence has risen in most of New Zealand's regions over the past three months.

On the march - NZ GDP review, Q2 2013 - 19 September 2013
A short but intense drought took a significant bite out of production in the first half of this year. But underlying growth is looking increasingly robust, led by a construction boom and rising house values.

A fonder look back - NZ Current Account review, Q2 2013 - 18 September 2013
The current account deficit unexpectedly narrowed to 4.3% of GDP, with data improvements painting a slightly more flattering picture of the deficit over the last couple of years. But we still expect it to widen from next year as domestic activity picks up.

Fortnightly Agri Update - 18 September 2013

Home Truths: Westpac's monthly housing market analysis - 16 September 2013
The housing market is still trucking along nicely. But recent rises in fixed mortgage rates, along with the Reserve Bank's recently announced lending restrictions, point to a gradual slowdown in the market from late this year.

A note of caution - Q3 Westpac McDermott Miller Consumer Confidence Index: 115.4 - 16 September 2013
Consumer confidence remains high, but attitudes towards spending have become more cautious.

Dried out - NZ GDP and Current Account preview, Q2 2013 - 13 September 2013
We expect a 0.1% decline in GDP, as drought took a heavy toll on agricultural production over the June quarter.

Shine a light - September 2013 Monetary Policy Statement review - 12 September 2013
The September MPS reinforced and elaborated on the more hawkish tone that was apparent in the July OCR review. An extended series of rate hikes is expected to begin early next year.

Taking a back seat - September 2013 Monetary Policy Statement preview - 5 September 2013
The September MPS will likely foreshadow earlier OCR hikes than the June MPS, but will be similar in tone to the July OCR review.

NZ Building Work Q2 2013 Review - 4 September 2013
Building activity edged down in the June quarter, but consents point to a substantially stronger pipeline of work for the second half of this year.

Fortnightly Agri Update - 4 September 2013

First leg of the trifecta - Q2 Terms of trade review 2013 - 2 September 2013
Q2 terms of trade surged, and are headed for a 40-year high in the September quarter.

Macroprudential tools: the international experience - 28 August 2013
In this article we review four international case studies of macroprudential tools, in order to shed to light on New Zealand’s recently announced loan-to-value ratio restrictions.

Fortnightly Agri Update - 21 August 2013

Q2 Retail Sales Review - 14 August 2013
Confident consumers were out in force in the June quarter, with a 1.7% lift in real retail sales.

Home Truths: Westpac's monthly housing market analysis - 12 August 2013
This month Home Truths ponders how the New Zealand housing market might react to restrictions on high loan-to-value ratio (LVR) home loans, widely expected to be imposed as early as this month.

Q2 Labour market review - 7 August 2013
As expected, the Household Labour Force saw modest payback from a very strong March quarter. That aside the labour market continues to improve. But there is still plenty of slack in the labour market, and little wage pressure.

Fortnightly Agri Update - 7 August 2013

Q2 Labour market preview - 5 August 2013
Stats NZ is now releasing all three main labour market reports in one go. We expect the overall upshot will be a gradually improving labour market - though the headline unemployment rate could bounce modestly after plunging in March.

Credit Check - 31July 2013

Fortnightly Agri Update - 26 July 2013

OCR Review July 2013 - 25 July 2013
The RBNZ has adopted an explicit hiking bias, in its first major change of stance since December 2011. The RBNZ's new position is more in line with our views.

OCR Preview July 2013 - 23 July 2013
Markets are champing at the bit to price OCR hikes, but we expect the RBNZ will disappoint on Thursday. It is simply too soon for the RBNZ to abandon its "firmly on hold" stance.

Fortnightly Agri Update - 17 July 2013

Q2 CPI Review 2013 - 16 July 2013
Past strength in the NZ dollar helped to bring annual inflation down to a 14-year low, but housing-related price pressures are on the rise.

Q2 CPI Preview 2013 - 12 July 2013
The rising New Zealand dollar had a major depressing effect on prices in the year to June, which likely left annual inflation below 1% for a fourth straight quarter.

Q2 QSBO Review 2013 - 9 July 2013
Business confidence remained at high levels for a third straight quarter.

Home Truths - July 2013
Westpac's monthly analysis of New Zealand's housing market.

Fortnightly Agri Update - 3 July 2013

Q1 GDP Review 2013 - 20 June 2013
The pace of growth came back to earth in Q1 after soaring in Q4. Construction is booming but the drought has been a drag.

Q1 Current account review - 19 June 2013
New Zealand’s current account balance gets a free pass in the March quarter as the deficit narrowed 0.2 percentage points to 4.8% of GDP.

Fortnightly Agri Update - 19 June 2013

Q1 GDP and current account preview - 14 June 2013
We expect modest, drought-affected GDP growth and a narrowing of the current account deficit in the March quarter.

RBNZ MPS Review June 2013 - 13 June 2013
The RBNZ played a straight bat, reiterating that it remains stuck between the high exchange rate and rising house prices. But the RBNZ did not factor in the recent drop in NZD.

RBNZ MPS Preview June 2013 - 7 June 2013
The front page of the MPS might be hawkish, but the possibility of restricting mortgage lending will throw a spanner in the works.

NZ Building Work Q1 2013 Review - 5 June 2013
New Zealand's building activity surged 5.8% in Q1 as the Canterbury rebuild gathers a head of steam.

Fortnightly Agri Update - 5 June 2013

Q1 Terms of Trade Review 2013 - 31 May 2013
New Zealand's terms of trade rose strongly in Q1, with lots more to come over 2013.

NZ Government Budget 2013 Review - 16 May 2013
Another cautious budget delivered in better economic circumstances.

Budget 2013 First Impressions - 16 May 2013
Save the lollies 'till next year.

Fortnightly Dairy Update - 16 May 2013

Home Truths - May 2013
Westpac's monthly analysis of New Zealand's housing market.

Q1 Retail Sales Review - 14 May 2013
Steady growth in retail spending, reflecting the pace of recovery in the broader economy.

Budget 2013 preview - 14 May 2013
Plans for a return to surplus by 2015 are on track, but with little wiggle room for new spending initiatives at this stage.

Q1 Household Labour Force Survey - 9 May 2013
A pervasively strong HLFS, closing the gap with other labour market indicators.

RBNZ May 2013 Financial Stability Report - 8 May 2013
Heightened concerns about the effect of low interest rates on the housing market lead the RBNZ to impose a larger safety buffer on the major banks.

Q1 Labour Cost Index and Quarterly Employment Survey  - 7 May 2013
Wage inflation and employment growth remain subdued.

Official cash rate review - 24 April 2013
The RBNZ struck a balance between high growth and low inflation, maintaining the "on hold" outlook for the OCR.

Official cash rate preview - 19 April 2013
We expect the RBNZ to maintain its "on hold" stance for the OCR, while emphasising risks on both sides of the outlook.

Q1 Consumer Price Index review - 18 April 2013
Inflation remains low as expected, with the high NZ dollar keeping tradables prices down and construction cost inflation still limited to the Canterbury region.

Fortnightly Dairy Update - 17 April 2013

Drought, Chinese Mums, and the price of milk - 16 April 2013
We take a look at the unexpected consequences of the 2013 New Zealand drought

Q4 Consumer Price Index preview - 12 April 2013
Another sub-1% inflation print expected, with the strong NZ dollar countering a gradual build-up in domestic price pressures.

Home Truths - April 2013
Westpac's monthly analysis of New Zealand's housing market.

Q1 NZIER Quarterly Survey of Business Opinion - 9 April 2013
The economy continued its strong run in Q1, and spare capacity is tightening. Inflation remains low for now, but this auspicious mix won't last.

Q4 GDP review - 21 March 2013
An even harder than expected rebound in growth, but consistent with our view that low interest rates and the Canterbury rebuild will stimulate the domestic economy.

Home Truths - March 2013
Westpac's monthly analysis of New Zealand's housing market.

Q4 Current Account Review - 20 March 2013
New Zealand’s current account deficit widened to 5.0% of GDP in the December quarter as imbalances re-emerge.

Fortnightly Dairy Update - 20 March 2013

Where should we build? - 19 March 2013
A look at housing supply and the construction outlook in all regions of New Zealand except Canterbury. 

Q4 GDP and Current Account preview - 18 March 2013
The New Zealand economy appears to have bounced back from a mid-2012 soft patch, with broad-based growth in the December quarter.

March 2013 MPS Review - 14 March 2013
RBNZ repeated its 'on hold' message but turned the spotlight on the downside risks if the exchange rate remains high.

MPS Preview - 8 March 2013
We expect the RBNZ will repeat its uncomplicated outlook for the OCR - it is on hold. 

Tool time - 4 March 2013
A first look at the Reserve Bank's suite of macroprudential policy tools - their purpose, the options, and when they might first be used.

Q4 Terms of Trade - 1 March 2013
New Zealand’s terms of trade clocked up its sixth consecutive fall in Q4, decreasing 1.3%.

A season of two halves - 1 March 2013
A primer on dry weather in New Zealand

Credit Check - 28 February 2013 

Realities of NZD intervention - 22 February
All you need to know about the Reserve Bank's approach to exchange rate intervention.

When rising tides don’t lift all boats - 20 February 2013
Household Income Growth since 2008

Fortnightly Dairy Update - 20 February 2013

Home Truths - February 2013
Westpac's monthly analysis of New Zealand's housing market.

Q4 Labour Cost Index and Quarterly Employment Survey - 5 February 2013
Wage pressures from the Canterbury rebuild are evident, but remain well-contained. 

Q4 Labour Market Preview - 1 February 2013
We expect a modest correction in the volatile Household Labour Force Survey.

Credit Check - 31 January 2013 

Official cash rate review - 31 January 2013
The RBNZ is more concerned that rising house prices could provoke inflation pressure and unbalance the economy - a sentiment we agree with strongly. 

Q4 Consumer Price Index Review 18 January 2013
The Consumer Price Index (CPI) fell 0.2% in the December quarter, a bit softer than expected. Annual inflation rose slightly from a 13-year low.

Fortnightly Dairy Update - 17 January 2013

Home Truths - January 2013
Westpac's monthly analysis of New Zealand's housing market.

Q4 NZIER Quarterly Survey of Business Opinion - 15 January 2013
Firms reported a robust pick-up in activity in Q4, with little inflation pressures to speak of.

Q4 Consumer Price Index preview - 14 January 2013
Prices expected to be flat for the quarter, but with annual inflation starting to lift from a 13-year low.

Loose impressions - 21 December 2012

Q3 GDP review - 20 December 2012
A flat economy outside of construction, but reason to see this as the low point for the year.

Q3 Current Account Review - 19 December 2012
New Zealand’s current account deficit narrowed a touch to 4.7% of GDP in the September quarter.

Fortnightly Dairy Update - 19 December 2012

Half-Year Fiscal and Economic Update - 18 December 2012
Changes around the margin leave the Government on track for surplus in three years. Long-term fiscal challenges will not be addressed so easily. 

Q3 GDP and Current Account preview - 14 December 2012
A flat economy in the September quarter, even with a sharp lift in construction and exports.

Home Truths - December 2012
Westpac's monthly analysis of New Zealand's housing market.

December MPS Review - 6 December 2012
As expected, the RBNZ reiterated that the next move in the OCR is up, not down.

Q3 Building Work Put in Place - 5 December 2012
A 9.6% lift in building activity as the Canterbury rebuild kicks into gear and Auckland starts to address its shortfall.

Fortnightly Dairy Update - 5 December 2012

Q3 Terms of Trade - 3 December 2012
New Zealand's terms of trade clocked up its fifth consecutive fall in the September quarter, decreasing 3.2%.

MPS Preview December 2012 - 29 November 2012
We expect the RBNZ to reiterate the "on hold for now" OCR outlook, but the discussion of risks could shift towards the housing market. 

Loose impressions - 23 November 2012

Fortnightly Dairy Update - 21 November 2012

Q3 Retail Sales Review - 14 November 2012
A fall in retail spending underscores the economy's recent slowdown, albeit one that we think was contained to Q3.

Home Truths - 9 November 2012
Westpac's monthly analysis of New Zealand's housing market.

Q3 Household Labour Force Survey - 8 November 2012
A shocker of a labour market report.

Q3 Labour Market Preview - 1 November 2012
The economy weakened over the September quarter, as did indicators of the labour market.

Credit Check - 31 October 2012

Loose impressions - 31 October 2012

First impressions - 26 October 2012
RBNZ Governor Wheeler's first speech is the essential guide to how monetary policy will be conducted in coming years.

Official cash rate review - 25 October 2012
RBNZ Governor Wheeler’s first OCR review statement offered little advance on recent statements, dampening market speculation of a more dovish approach.

No ordinary OCR - 19 October 2012
There has been little in the data to change the RBNZ’s “on hold” outlook for the OCR.

Fortnightly Dairy Update - 17 October 2012

Q3 Consumer Price Index Review - 19 October 2012
General inflation well contained due to soft growth and the legacy of a higher NZ dollar; but construction cost inflation is creeping in.

Q3 Consumer Price Index preview - 12 October
Annual inflation is expected to briefly dip below 1%, but the disinflationary forces of the last year or so are fading.

Q3 Consumer Price Index preview - 12 October 2012
Annual inflation is expected to briefly dip below 1%, but the disinflationary forces of the last year or so are fading.

Q3 NZIER Quarterly Survey of Business Opinion - 9 October 2012
Firms reported tougher times in Q3, but remain cautiously optimistic about the near term, particularly with the Christchurch rebuild picking up.

Home Truths - 8 October 2012
Westpac's monthly analysis of New Zealand's housing market.

Fortnightly Dairy Update - 3 October 2012

Credit Check - 28 September 2012

Loose impressions - 26 September 2012

Policy Targets Agreement -  20 September 2012
The new Policy Targets Agreement has tightened up on the definition of inflation, while introducing a new focus on asset prices.

Q2 GDP review -  20 September 2012
A second quarter of stronger than expected growth, led by agriculture and construction.

Q2 Current Account Review - 19 September 2012
New Zealand’s current account deficit widened to 4.9% of GDP in the June quarter.

Fortnightly Dairy Update - 19 September 2012

Q2 GDP and Current Account preview - 14 September 2012
Slower growth in activity relative to the March quarter, and weaker export conditions adding to the international imbalance.

September MPS Review - 13 September 2012
Alan Bollard will leave the RBNZ in good shape after 80 OCR reviews.

Home Truths - 10 September 2012
Westpac's monthly analysis of New Zealand's housing market.

September MPS Preview - 7 September 2012
A broadly unchanged outlook from June, with interest rates firmly on hold.

Q2 Building Work Put in Place - 3 September 2012
Today’s Building Activity Survey showed a 0.8% lift in building work.

Fortnightly Dairy Update - 5 September 2012

Q2 Terms of Trade - 3 September 2012
New Zealand’s terms of trade fell 2.6% in the June quarter.

Loose Impressions - 29 August 2012

NZ Q2 real retail sales - 14 August 2012
Real retail sales rose a hefty 1.3% in the June quarter.

Q2 Household Labour Force Survey - 9 August 2012
A stubbornly soft labour market, despite mounting evidence that the economy has picked up steam.

Q2 Labour Cost Index and Quarterly Employment Survey - 7 August 2012
QES employment and hours paid surprisingly strong but little sign of rising wage pressure.

Q2 Labour Market Preview - 3 August 2012
Another soft labour market report likely despite rising surveyed skill shortages.

OCR Review - 26 July 2012
RBNZ firmly on hold, unfazed by current low headline inflation.

Loose impressions - 20 July 2012
Mixed indicators in June, with many settling down after a May bounce.

OCR Preview July 2012 - 19 July 2012
RBNZ expected to leave OCR on hold, emphasising low inflation. We now expect a first OCR hike in July 2013.

Q2 Consumer Price Index Review - 17 July 2012
Annual inflation hits a 12-year low, with housing-related inflation not consistently shining through yet.

Q2 Consumer Price Index Preview  - 11 July 2012
Subdued inflation for now, but watch for housing-related inflation as house values rise and quake rebuilding progresses.

Q2 NZIER Quarterly Survey of Business Opinion - 10 July 2012
General confidence hit by global events, while domestic activity is becoming more construction-oriented.

Loose impressions - 5 July 2012

Eurogeddon - 3 July 2012
An investigation into what would become of New Zealand in a scenario of financial meltdown in Europe.

New man at the helm - 26 June 2012
Graeme Wheeler has been appointed Governor of the Reserve Bank of New Zealand, effective 25 September.

Q1 GDP review - 21 June 2012
Growth is picking up this year as we anticipated, although the 1.1% rise in Q1 probably overstates the case.

Q1 Current Account Deficit - 20 June 2012
New Zealand’s current account deficit widened to 4.8% of GDP in the March quarter, led by a narrowing goods surplus and a larger services deficit.

Q1 GDP and Current Account preview - 15 June 2012
Faster growth and a wider deficit expected as the economy shows more signs of life than in the past two years.

June MPS Review - 14 June 2012
OCR unchanged at 2.50%, RBNZ reiterates on-hold stance

Q1 Building work put in place - 6 June 2012
Building activity fell 0.4% in the March quarter, but the pace of growth in Canterbury continues to outstrip the rest of the country.

June OCR Preview - 6 June 2012
RBNZ expected to leave OCR on hold but emphasise ability to cut in need.

Q1 Terms of Trade - 1 June 2012
New Zealand's terms of trade registered its third consecutive fall in the March quarter, declining 2.3%.

Budget 2012 review - 24 May 2012
A conservative budget befitting these uncertain times. But does the Government have a plan to deal with population aging?

Budget 2012 preview - 18 May 2012
Another year with no net new spending, as the Government tries to rein in the deficit by 2015.

Q1 Retail Sales Review - 14 May 2012
A 1.5% pullback from last year's Rugby World Cup boost, but signs of improving local demand as well.

Q1 Household Labour Force Survey - 3 May 2012
While a lift in construction-related employment is underway, the broader labour market has yet to stage a convincing recovery.

Q1 Labour Market review - 1 May 2012
Wage inflation remains contained, in line with the RBNZ's expectations.

OCR Review - April 2012
RBNZ firmly on hold, and the risk of easing in response to the high NZ dollar shouldn't be dismissed.

Q1 Labour Market preview - 27 April 2012
Surveys indicate a modest fall in unemployment, and wage growth remaining subdued.

Official Cash Rate Preview - 20 April 2012
A modestly dovish tone, as the RBNZ edges further away from signalling interest rate hikes.

Q1 Consumer Price Index Review - 19 April 2012
Consumer prices up modestly as expected, but some surprising strength in housing-related inflation.

Q1 Consumer Price Index Preview - 13 April 2012
We expect a 0.5% increase, with risks around housing-related costs and the impact of the strong NZ dollar.

Q1 NZIER Quarterly Survey of Business Opinion - 11 April 2012
Business confidence higher, but suggests continued slow growth for now until reconstruction ramps up later this year.

Q4 GDP Review - 22 March 2012
Less growth than expected, but signs of improving domestic demand and progress on rebuilding.

Q4 Current Account Review - 21 March 2012
New Zealand’s current account balance narrowed modestly to -4% of GDP in Dec 2011

Three points of a triangle - 19 March 2012
The debate on New Zealand interest rates has fractured into three points of a triangle. This could throw up interesting scenarios in the year ahead.

Q4 GDP Preview - 16 March 2012
We estimate that GDP grew an about-trend 0.6%, led by improving domestic demand and favourable growing conditions.

Q4 Current Account Preview - 15 March 2012
Q4 current account deficit is forecast to narrow slightly to -4% of GDP on the back of an improvement in the goods balance.

MPS (March) Review - 8 March 2012
The RBNZ expects faster growth but believes that the high NZ dollar will take care of inflation pressures.

Q4 Building work put in place - 5 March 2012
A strong pick-up in building work in Canterbury led nationwide building activity higher in Q4.

MPS (March) Preview - 5 March 2012
The RBNZ will project slower rate hikes and the high exchange rate is likely to come in for some attention.

Q4 Terms of Trade - 1 March 2012
The terms of trade is sliding from exceptionally high levels as external conditions have become more challenging.

Q4 Retail Sales Review - 15 February 2012
Retail spending boosted by the Rugby World Cup as well as signs of improving local demand.

Q4 Household Labour Force Survey  - 9 February 2012
Unemployment fell, but the details were less rosy.

Q4 Labour Cost Index and Quaterly Employment Survey - 7 February 2012
Wage growth a bit stronger than expected but subdued overall.

Q4 Labour Market Preview - 2 February 2012
Surveys point to employment picking up, but unemployment staying high

Changing the watch - 1 February 2012
Prospects for the RBNZ as Governor Alan Bollard announces he will step down in September.

Official Cash Rate Review - 26 Janurary 2012
The RBNZ signals a longer wait for rate hikes as Europe's woes and Canterbury's rebuild play out.

Official Cash Rate Preview - 23 January 2012
The recent easing in inflation pressures gives the RBNZ room to wait and see.

Q4 Consumer Price Index Review - 19 January 2012
Prices unexpectedly fall as consumers benefit from domestic competition and the strong NZD.

Q4 NZIER Quarterly Survey of Business Opinion - 17 January 2012
Confidence down as global risks mount and local activity slows, but Canterbury remains positive.

Q4 Consumer Price Index Preview - 12 January 2012
Unemployment fell, but the details were less rosy.

In-depth review of topical issues.

Deeper insights

  • Great expectations - What drives the New Zealand dollar - 2 October 2014
    The latest developments in New Zealand’s agri markets.
  • NZ labour force participation - In or out - 9 September 2014
    New Zealand's labour force participation rate has risen sharply in the last two decades to become one of the highest in the OECD. We show that this outperformance has been driven by older people, with New Zealand's retirement policies minimising the disincentive to working later in life. Our view is that the trend toward later retirement will continue to head off the effects of an ageing workforce for another couple of years.
  • New Zealand's neutral OCR: a moving feast - 22 October 2013
    The neutral OCR will be a crucial determinant of the peak of the upcoming OCR hiking cycle. Neutral may be around 4.5% today, but there are strong reasons to expect it will rise over the coming few years. This short bulletin explains why we think neutral will reach 5%.
  • Eye on the horizon - longer-term economic forecasts for New Zealand - 17 October 2013
    We are often asked for our longer-term economic forecasts. In this bulletin we respond to those requests by extending our forecasts out to 2023. We begin by briefly describing how we expect the current cycle to play out. We then outline our key longer-term assumptions.
  • Sleeping beauty is awake - an update on the NZ tourism sector - 24 September 2013
    A review of the recent history and near-term prospects of New Zealand's tourism industry.
  • Lowering the boom - RBNZ restricts high-LVR lending - 20 August 2013
    The RBNZ has brought its macroprudential toolkit into action, setting limits on the share of high loan-to-value ratio mortgages. We expect an initial 'sticker shock' for the housing market, but a limited impact over the longer term; interest rates are the main determinant of housing demand.
  • Hair of the Dog - 10 June 2013
    In this article we explain why we expect New Zealand's rising housing market to boost household spending.
  • Drought, Chinese Mums, and the price of milk - 16 April 2013
    We take a look at the unexpected consequences of the 2013 New Zealand drought
  • Where should we build? 19 March 2013
    A look at housing supply and the construction outlook in all regions of New Zealand except Canterbury. 
  • Tool time - 4 March
    A first look at the Reserve Bank's suite of macroprudential policy tools - their purpose, the options, and when they might first be used.
  • A season of two halves - 1 March 2013
    A primer on dry weather in New Zealand
  • Realities of NZD intervention - 22 February 2013
    All you need to know about the Reserve Bank's approach to exchange rate intervention.

  • When rising tides don’t lift all boats - 20 February 2013
    Household Income Growth since 2008
  • President Obama and the Fiscal Cliff - 12 November 2012
    Without an agreement over the fiscal cliff, the US is facing a potential 4ppt reduction in net government spending in FY2013 that would almost surely result in a recession.
  • Gentlemen's agreement - 18 September 2012
    Incoming RBNZ Governor Graeme Wheeler is due to sign a new Policy Targets Agreement soon. We don't expect substantial changes to the document, which covers only a narrow aspect of the Governor's role - but bigger changes could be on the way in coming years.
  • Delever me? - 11 September 2012
    A closer look at the drivers of household debt. We conclude debt is likely to stay historically high, but grow more slowly than last decade.
  • Save us! - 20 August 2012
    We review the evidence on New Zealand's saving performance and conclude it's probably not been as dire as official measures suggest.
  • Rebuilding a City - 16 August 2012
    Here we collate some of the available evidence to build a picture of how the local economy and the rebuild are progressing.
  • Eurogeddon - 3 July 2012
    An investigation into what would become of New Zealand in a scenario of financial meltdown in Europe.
  • New man at the helm - 26 June 2012
    Graeme Wheeler has been appointed Governor of the Reserve Bank of New Zealand, effective 25 September.
  • Nice for now - 27 March 2012
    The New Zealand housing is resurgent for now, but the cheer may not last.
  • Three points of a triangle - 19 March 2012
    The debate on New Zealand interest rates has fractured into three points of a triangle. This could throw up interesting scenarios in the year ahead.
  • Time to fix - 2 March 2012
    The balance of risks for mortgage borrowers now favours fixing.
  • Changing the watch - 1 February 2012
    Prospects for the RBNZ as Governor Alan Bollard announces he will step down in September.
  • The construction sector: past, present and future - 14 December 2011
    The construction sector has been a notable area of weakness in the New Zealand economy over the last few years, however we expect a significant turnaround in fortunes ahead, driven by building in Auckland and Canterbury.
  • Hold your horses - 9 December 2011
    Our model predicts the NZD/AUD exchange rate will eventually rise to a more normal level, but not before global credit conditions improve.
  • The turning Tide - 23 November 2011
    An analysis of trans-Tasman migration and how it relates to Australian and NZ unemployment.
  • Digesting Dairy Prices - 18 August 2011
    A discussion of the outlook for dairy prices in an uncertain world.
  • Ear to the ground - 10 August 2011
    Anecdotes about the rebuild from Christchurch
  • US Fiscal Folly - 4 August 2011
    US lawmakers dodge a self-inflicted crisis, but do little to address the fiscal malaise that affects all levels of Government.
  • Disasters in history - 8 July 2011
    A review of the lessons from the Napier, Kobe and Chile earthquakes, as well as Hurricane Katrina.
  • A matter of Exchange - 24 June 2011
    We review the links between saving, interest rates, and the exchange rate, and interrogate some dubious claims.
  • Forestry Sector Overview - 10 June 2011
    An overview of one of New Zealand's key primary industries including a discussion of the differing fortunes of forest growers and wood processors.
  • Shape of things to come - 7 March 2011
    Discusses how the Christchurch Earthquake has radically altered the New Zealand's economic outlook
  • Why so glum? - 15 December 2010
    Global financial stress has been a key driver of the low NZD/AUD exchange rate since 2009.
  • Raising interest - 28 September 2010
    Investigates the responsiveness of retail bank deposits to interest rates.
  • Shaky Isles - 6 September 2010
    Assessment of the possible impact of the September 2010 Canterbury earthquake.
  • Crossing the line - 23 August 2010
    NZD/AUD exchange rate model update
  • Being effective - 17 August 2010
    The last of our series on the interest rate landscape shows that borrowing costs have continued to ease even without RBNZ action.
  • Neutral about neutral - 16 August 2010
    The third instalment in our series on the new interest rate landscape discusses the neutral OCR, a concept that proves surprisingly elusive.
  • A matter of interest - 12 August 2010
    The second of our series on the new interest rate landscape, we trace through six important flow-on effects from higher bank funding costs.
  • Before and after - 9 August 2010
    In the first of a series on the new interest rate landscape, we review how bank funding has been affected by the Global Financial Crisis.
  • House prices - further to fall - 2 July 2010
    We believe house prices have further to fall, not least because of a change to the rate of income tax which has reduced the tax incentive to invest in rental property.
  • Ease the squeeze, please - 25 June 2010
    New Zealand is building too few houses to keep up with population growth – a housing squeeze lies ahead.
  • The big GST step - 12 February 2010
    Tax reforms should provide improved incentives over the longer term, but not without sizeable disruptions at the time of implementation.
  • Sectoral performance - 15 January 2010
    Winners and losers in the recession and recovery.
  • Tax and house prices - 16 December 2009
    Changes to the tax system are likely to reduce house values.
  • Split fortunes - 4 December 2009
    Manufacturers have been squeezed by rising costs and a strong NZ dollar. An improving world economy will help some sectors, but non-food manufacturing will continue to lag.
  • This time is different - 25 November 2009
    Eight decades of recoveries.
  • Housing encore - 12 November 2009
    Update on the New Zealand housing market.
  • Buffet or buffer - 24 September 2009
    Does the exchange rate hinder or help commodity exporters?
  • No need to get cross - 15 September 2009
    NZD/AUD model update.
  • Getting more for your money - 20 August 2009
    Consumers weren’t the only party animals this decade – a stronger terms of trade underpinned spending and borrowing across all sectors.
  • Variable gravity - 20 August 2009
    Practices in the NZ housing market are vastly different to those in the US.
  • The return of HEW - 10 August 2009
    Homeowners have switched from drawing on housing wealth to accumulating it – though the pace is slowing.
  • When cash is not currency - 10 August 2009
    The relationship between the OCR and the exchange rate is not stable enough to serve as a policy lever.
  • Funding it tough - 23 June 2009
    Running the ruler over claims about bank margins in the wake of the Global Financial Crisis.
  • Flu jab - 18 June 2009
    The potential impact of an H1N1 influenza epidemic on the NZ economy.
  • Flash in the pan - 4 June 2009
    Housing pickup unsustainable
  • The money tree - 17 April 2009
    Quantitative easing: what it is, and the chances of NZ going down this path.
  • A changing climate - 4 March 2009
    New Zealand’s options for addressing climate change.

NZ Occasional Papers

Quarterly Economic Overview

Quarterly publication providing an in-depth economic outlook, topical issues and forecasts.

  • August 2014
    A summary of the prospects for New Zealand's economy, interest rates, exchange rate and agricultural sector, plus an overview of the global economy.
  • May 2014
    As New Zealand's economic upswing rolls on, we are starting to see encouraging signs that the economy still has room to grow without generating excessive inflation. However, we still expect a substantial OCR hiking cycle over the coming three years. This year's election is a key risk event - the Special Topic this quarter provides a guide for financial markets.
  • February 2014
    The construction boom and rising house prices are now maturing themes for the New Zealand economy. This quarter, the NZ Economic Overview focusses on the causes and consequences of New Zealand's stratospheric export commodity prices.
  • November 2013
    Comprehensive analysis and forecasts of the New Zealand economy, global economy, and financial markets.
  • August 2013
    New Zealand is now clearly in the grip of a self-sustaining economic upswing, driven by construction activity and house prices. Our Economic Overview discusses the implications for interest rates while noting that the upturn will prove temporary. The remaining "forks in the road" for New Zealand include the question of Fed tapering and the possible impact of the RBNZ's new mortgage restrictions. Our expectation of a substantial OCR hiking cycle has not changed.
  • May 2013
    The New Zealand economy is caught in a tug-of-war between high GDP growth and low inflation. The May Economic Overview includes articles on the New Zealand economy, New Zealand dollar, inflation and interest rates, and the international outlook. Our new section, Agricultural Outlook, covers the impact of drought on the New Zealand economy. And our special topic discusses the Reserve Bank's macroprudential tools.
  • February 2013
    The economy is starting to move as the Canterbury rebuild hits its straps. But the stratospheric exchange rate has kept inflation in check. So the RBNZ has been able to keep interest rates low. The predictable result has been improved consumer confidence and higher house prices. Our forecasts for 2013 follow the same formula, but with greater intensity on all fronts.
  • November 2012
    After a strong start to 2012, the New Zealand economy has lost momentum, reflecting the patchiness of the current construction-led economic upturn.
  • August 2012
    Growth is accelerating but low inflation and the strong exchange rate mean interest rates will stay low for longer. This edition of the Economic Outlook discusses the possibility that rising house prices will reignite New Zealand's economic imbalances.
  • May 2012
    The global economy has cooled as expected, but the surprisingly strong NZ dollar and soft inflation point to low interest rates for a while longer.
  • February 2012
    Export conditions are deteriorating, but we envisage a dip rather than a disaster. Low interest rates will boost the housing market.

AgriBiz

Quarterly focus on rural developments, trends and outlook.

  • January 2013
    In this quarter’s Agribiz, we look at why lamb prices fell hard over 2012 while beef prices remained at near record highs, and take a look at the prospects for rural land market.
  • October 2012
    In this quarter’s Agribiz we look at some of the risks higher global food prices bring for the global economy, and investigate what impact higher grain prices might have on prices of key New Zealand exports such as meat and dairy.
  • July 2012
    In this quarter’s Agribiz we examine recent moves in dairy prices and look at what the outlook might be from here.
  • April 2012
    In the April Agribiz, we shine a spotlight on recent developments in the meat sector.
  • January 2012
    The international outlook remains stormy, and in this quarter's Agribiz we take a closer look at what this might mean for interest rates and the NZD.

Consumer Confidence

Quarterly survey on consumer activity, spending and expectations of the current economy.

 

Employment Confidence

Quarterly survey on employer activity, spending and expectations of the current economy.

 

Regional Economic Confidence

Quarterly survey on regional employer activity, spending and expectations of the current economy