Economic research & market strategy

Here you will find economic research, strategy and forecasts direct from our specialists.

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Economic research & market strategy

Weekly Commentary

Weekly coverage of recent and upcoming economic and market events.


To view archived reports click here.

Economic Data Reports

Previews and reviews of the latest economic data releases.

Fortnightly Agri Update - 18 November 2015
The latest developments in New Zealand's agri markets

Retail sales rebound - NZ retail sales, September quarter 2015 - 16 November 2015
Retail spending growth rebounded in the September quarter, boosted by spending on motor vehicles.

Reserve Bank of NZ Financial Stability Report - 11 November 2015

Home Truths: Westpac's monthly commentary on the NZ housing market - 11 November 2015
A fresh perspective on the New Zealand housing market.

NZ Local Knowledge - 6 November 2015
Activity indicators softened in September, not surprisingly as the burst of strength in July-August was a hard act to follow. Watch for housing and agriculture to feel the pinch in the coming months. 

NZ Labour market review, September 2015 - 4 November 2015
Underlying September quarter labour market data was softer than analysts expected and adds to signs that the economy has lost momentum.

Fortnightly Agri Update - 4 November 2015
The latest developments in New Zealand's agri markets

NZ Q3 Labour Market Preview - Unemployment to rise despite continued hiring - 30 October 2015
We expect the unemployment rate to rise to 6.2% in September as strong growth in the labour force offsets moderate growth in employment.  

RBNZ OCR Review, October 2015 - Kicking the can down the road - 29 October 2015
As expected the RBNZ left the OCR at 2.75%, signalled that it expects to cut the OCR again, and introduced more conditionality to the outlook.  

RBNZ OCR Preview, October 2015 - Cat out of the bag, again - 22 October 2015
The RBNZ is likely to leave the OCR on hold next week, but will signal that a cut is coming.

Fortnightly Agri Update - 21 October 2015
The latest developments in New Zealand's agri markets.

Signs of life - NZ Consumer Price Index review, Q3 2015 - 19 October 2015
Inflation was subdued in the September quarter but less so than expected, with the weaker New Zealand dollar having a delayed impact. We still forecast further OCR cuts but at a more gradual pace.

Home Truths: Westpac's monthly commentary on the NZ housing market - 12 October 2015
A fresh perspective on the New Zealand housing market.

Cost-cutting drive - NZ Consumer Price Index preview, Q3 2015 - 8 October 2015
A sharp drop in car registration fees is expected to take annual inflation down to a new low for this cycle. We expect the weaker New Zealand dollar to have had only a modest impact on prices to date.

Fortnightly Agri Update - 7 October 2015
The latest developments in New Zealand's agri markets.

NZ Local Knowledge - 6 October 2015
A very strong batch of activity data in July and August makes up for some of the disappointing softness over the first half of this year. Even so, we expect housing and agriculture to slow the economy's momentum again over coming months. 

Q3 NZ Quarterly Survey of Business Opinion - 6 October 2015
Today’s report highlighted that economic activity has held up in recent months. However, confidence in the outlook has fallen sharply. 

Earnings concerns growing - NZ Employment confidence Q3 2015 - 28 September 2015
New Zealanders have become increasingly concerned about the state of the labour market. 

A tale of two economies - Westpac McDermott Miller Regional Economic Confidence, September quarter 2015 - 24 September 2015
Regional economic confidence remained flat across New Zealand in September, with a dichotomy emerging between dairying regions and those with less dairy exposure. 

Will we see a sustained pick-up in inflation? - 23 September 2015
Inflation will rebound over the coming months, but we don’t expect this to be sustained. 

Down but not out - NZ Consumer Confidence Index, Q3 2015 - 21 September 2015
Consumer confidence has taken another step lower as the economic climate has soured. But for now, it suggests spending is coming off the boil, not grinding to a halt.

Meek rebound - NZ GDP review, Q2 2015 - 17 September 2015
GDP growth remained sluggish in the June quarter, even with some sectors bouncing back from temporarily depressed levels. The weaker than expected result will strengthen the case for OCR cuts.

Better with hindsight - NZ current account review, Q2 2015 - 16 September 2015
New Zealand's current account deficit widened in the June quarter, although revisions helped to improve the annual balance. We expect a further deterioration over the next year as the impact of lower dairy prices flows through.

Fortnightly Agri Update - 16 September 2015
The latest developments in New Zealand's agri markets.

RBNZ MPS review, September 2015 - Doubling down on the dollar - 10 September 2015
As expected, the RBNZ cut the OCR 25bps, and signalled one further cut at an unspecified date.

Faster but slower - NZ GDP and Current Account preview, Q2 2015 - 9 September 2015
GDP growth is likely to pick up in the June quarter as some temporary factors are reversed. But the pace of growth has clearly slowed since last year, reflecting the dairy downturn and the peak in the earthquake rebuild.

NZ Local Knowledge - 4 September 2015
The New Zealand economy defied the gloom with a strong batch of data over July. Nevertheless, we expect the dairy downturn and the peak of the quake rebuild to weigh on growth over the next two years.

RBNZ MPS preview, September 2015 - A tough line to cross - 4 September 2015
We expect the RBNZ will cut the OCR 25bps, and signal one further cut at an unspecified date.

NZ building work put in place - June quarter 2015 - 3 September 2015
Total building work put in place rose 1.6% in the June quarter, taking the level of building activity to its highest level in ten years. June's increase in building work was underpinned by a 5% increase in non-residential construction. This offset a 1% decline in residential construction.Five years on from the first of the devastating earthquakes that struck the Canterbury region, we take a look at how the reconstruction process is evolving.

Fortnightly Agri Update - 2 September 2015
The latest developments in New Zealand's agri markets.

Fortnightly Agri Update - 19 August 2015
The latest developments in New Zealand's agri markets.

Pulling back – NZ retail sales, June quarter 2015 - 14 August 2015
Retail spending growth slowed sharply in the June quarter, dampened by the rebound in petrol prices. At this stage we are seeing a softening in spending – not a collapse. However, we do expect to see a more pronounced weakening in demand in the economy over the coming months.

Home Truths: Westpac's monthly commentary on the NZ housing market - 14 August 2015
A fresh perspective on the New Zealand housing market.

Labour demand softening, conditions to ease further. NZ labour market review June quarter 2015 - 5 August 2015
June quarter labour market data have added to signs that the economy has lost momentum through mid-2015.

Fortnightly Agri Update - 5 August 2015
The latest developments in New Zealand's agri markets.

NZ Local Knowledge - 4 August 2015
Momentum in the domestic economy is slowing, as low dairy prices undermine confidence in other sectors.

Labour demand softening while wage growth remains low - NZ Labour Market Preview, June 2015 - 31 July 2015
We expect the unemployment rate to rise to 5.9% in June as demand for workers softens. Wage inflation is expected to have remained low, with any material pick-up someway off. With wage growth likely to remain low and consumer price inflation starting to pick up, households’ purchasing power will come under increasing pressure over the coming year.

RBNZ OCR Review July 2015 - Down to the waterline - 23 July 2015
As expected, the RBNZ cut the OCR 25 basis points and signalled more to come.

Home Truths: Westpac's monthly commentary on the NZ housing market - 22 July 2015
The latest data show Auckland's house prices are "going vertical", while other regions stagnate. Recent policy changes may alter that mix.

How low will it go - RBNZ OCR preview July 2015 - 21 July 2015
Our base case is a 25bps OCR cut on Thursday, but there is a clear risk of a 50bps cut. 

Pump priming - NZ Consumer Price Index review, Q2 2015 - 16 July 2015
Domestic inflation pressures remain very subdued, leaving the Reserve Bank increasingly reliant on a weaker NZD in order to achieve its inflation target. We now expect the OCR to be reduced to 2% by the end of this year.

Fortnightly Agri Update - 16 July 2015
The latest developments in New Zealand's agri markets.

Fill 'er up - NZ Consumer Price Index preview, Q2 2015 - 10 July 2015
We expect a 0.7% rise in the June quarter CPI, lifting annual inflation to a still-subdued 0.5%. The steep drop in fuel prices last quarter has largely been reversed, but elsewhere inflation pressures remain soft and the effects of a weaker New Zealand dollar will take some time.

NZ Local Knowledge - 7 July 2015
The New Zealand economy has held up better than the market gloom would suggest, though its momentum remains somewhat housing-centric.


In-depth review of topical issues.

Deeper insights

  • An update on New Zealand's migration outlook - 8 October 2015
    Net migration has reached record highs, thanks to a rising inflow of foreign migrants and a drop in the outflow of New Zealanders. Weak offshore labour markets could keep net migration high for a while yet. But over the longer term the current rate of population growth looks unsustainably high.
  • Industry insights – Oil, Gas and mining - 22 September 2015
    The outlook for Gold mining is decidedly stronger than for Coal mining, and Oil and gas.  We expect prices for coal and oil to remain low, creating the risk of job losses and in the case of oil and gas, far less exploration in New Zealand.  Meanwhile gold is expected to benefit from greater uncertainty in the global outlook, as an investor safe haven.
  • Outlook for Auckland residential construction - 18 August 2015
    Auckland continues to build fewer dwellings than is required to meet the demands of population growth. We estimate that the Auckland construction industry can deliver 10,800 dwellings a year within two years without risk of overbuilding, but that levels higher than this will be hard to achieve.
  • Peak or Plateau: Update on the Canterbury rebuild - 17 July 2015
    Reconstruction in Canterbury is now well advanced and spending appears to have reached a peak. We expect that construction activity in the region will remain elevated for some time. However, going forward reconstruction isn’t going to provide the same sort of boost to growth and employment as it has in recent years. And eventually the rebuild will become a drag on economic conditions.
  • A new take on the Auckland housing market - 14 May 2015
    This is an unabridged resend of our Home Truths Special Edition, sent for the benefit of customers who subscribe to our economic bulletins but not our regular housing market commentary.
  • Grow NZ survey results - 22 April 2015
    Results from Westpac's recent survey of SMEs, focussing on use of technology.
  • Focus on the Canterbury rebuild - 9 April 2015
    The Canterbury rebuild will be our nation’s largest ever construction project, and it will play an important role in shaping nationwide economic conditions for a number of years. In this Bulletin, we look at how the reconstruction process is evolving, and what we expect to see going forward.
  • 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.
  • 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.
  • 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

To view archived reports click here.

Quarterly Economic Overview

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

November 2015
The New Zealand economy has dodged the worst of the downturn in world dairy prices, but the slowing global economy and the risk of drought this summer will continue to weigh on agriculture. We expect GDP growth to slow to 2% next year - no more than population growth - before accelerating again in 2017. Through these ups and downs we expect one dynamic to remain constant: low inflation.

August 2015
New Zealand's economic outlook has changed. There has been a ferocious decline in the global price of New Zealand's biggest export, and the Canterbury rebuild has peaked nine months earlier than anticipated. This Economic Overview discusses the revised outlook, including our expectation that GDP growth will fall below 2%, unemployment will rise to 6.5%, and the OCR will fall to 2.0%.

May 2015
A summary of the prospects for New Zealand's economy, interest rates, exchange rate and agricultural sector, plus an overview of the global economy.

February 2015
A summary of the prospects for New Zealand's economy, interest rates, exchange rate and agricultural sector, plus an overview of the global economy.

November 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.

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.


Regional Roundup

Quarterly focus on the outlook for New Zealand's regions.

Regional Roundup - 10 November 2015
Three stories are driving regional economic fortunes – dairy, impending drought, and construction and housing activity.

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