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Statistics New Zealand says the 12.2% shrinkage of the economy in the June quarter is 'by far the largest on record in New Zealand'; the fall is in line with what major bank economists forecast

Statistics New Zealand says the 12.2% shrinkage of the economy in the June quarter is 'by far the largest on record in New Zealand'; the fall is in line with what major bank economists forecast

They said it would be huge - and it is. The economy shrank by 12.2% in the Covid lockdown-afflicted June quarter, which is much the largest quarterly fall New Zealand has seen, though is in line with what major bank economists were forecasting.

The massive drop in GDP, following a 1.4% fall in the March quarter (revised down from an originally announced -1.6% figure), confirmed the country as being in recession (with two consecutive quarters of minus GDP growth being the technical description of a recession).

Additionally, the big drop in the June quarter saw annual GDP to June fall 2%, which is the first annual decline in GDP since the March 2010 quarter when New Zealand was still grappling with the aftermath of the Global Financial Crisis.

The figure for the June quarter is, believe it or not, somewhat lower than had been predicted earlier in the year by economists due to the fact that New Zealand ended up spending less time in lockdown than was earlier thought. 

Treasury had at the time of the May Budget forecast a 23% drop and was, as recently as Wednesday's Pre-election Economic and Fiscal Update, forecasting a 16% drop. The Reserve Bank forecast -14.3% in its August Monetary Policy Statement.

Stats NZ had difficulties putting together the data given the most unusual circumstances of the near shutdown that occurred during the Level 4 lockdown. Given that, its expected that the figure released on Thursday will act as really only a starting point for measuring the extent of the fall in activity during the quarter and there will be subsequent revisions.

ASB chief economist Nick Tuffley and senior economist Jane Turner said despite the elevated level of uncertainty heading into the release, "there were no material surprises from our perspective". 

"The falls were largest in industries most exposed to border closures or unable to operate under Alert Level restrictions.  Essential activities and activities which could be completed remotely saw smaller than average declines. 

"In terms of economic implications – its not so much the size of the decline, but the size of the recovery which matters.  Q2 GDP has fallen by less than earlier estimates – in large part due to activity recovering faster and stronger during Alert Level 2 and 1 over the second half of the quarter.  We expect these trends to continue and – despite the setback of the August outbreak – we expect to see a firm rebound in Q3 GDP." 

Kiwibank chief economist Jarrod Kerr, senior economist Jeremy Couchman and economist Mary Jo Vergara said the GDP report was "expectedly weak". "There were few surprises to be fair. You lock up the economy, activity falls," they said.

"As economists, we love trawling through data. And we’ve never seen anything like this. It was traumatic. Service exports were stonewalled, and down 40% in the quarter. Consumption was down 12%, and investment was slashed by 20%. Essential services obviously held up far better during the lockdowns, and recorded more modest declines. We were a little surprised by the weakness in imports, with fuel down more than we expected – hence the slight upside from our estimate of 12.5% and the actual 12.2%. Never have we recorded such declines. And never have we bounced back so quickly, either.

"There is little point getting hung up on Q2 numbers," the Kiwibank economists said.

"There is likely to be major revisions to the numbers by Stats NZ as new information comes to hand. Also, the biggest decline in activity on record will probably be followed up by the largest quarterly jump. We are almost in the December quarter. The rebound in activity in Q3 is likely to have been softened by Auckland’s level 3 lockdown, but we are still picking a 10% qoq jump." 

ANZ senior economist Miles Workman said the September quarter is going to bring a very sharp (albeit partial) rebound, freeing the economy of its recessionary label, "but definitely not marking anything near a 'recovery' from this crisis".

"Indeed, we expect it will take about as long for activity to return to pre-crisis levels as it did following the Global Financial Crisis (9 quarters, see graph below).

"However, given the scale of the lockdown-induced decline and the persistent impacts of this crisis, we expect the cumulative loss in activity will be around 3-4 times larger," Workman said.

"So while Q3 will bring a sharp recovery in quarterly growth, we shouldn’t lose sight of the challenges that lie ahead. Policy makers certainly won’t.

"It’s the medium-term outlook that really matters for policy settings, and the lockdown-induced contraction in Q2 is only the first round of this economic shock. We’re yet to really feel the full impact of the closed border and the sharp (and very synchronised) global contraction. Not to mention the fact that the economy is yet to be weaned off an unprecedented amount of temporary support (such as the wage subsidy and mortgage relief). Fiscal and monetary policy still has its work cut out."

BNZ head of research Stephen Toplis said there had been a lot of debate about whether New Zealand’s lockdown in the second quarter warranted the economic cost of doing so.

"That debate will rage for many years but at least now we have a feeling for our relative economic experience. In short, what you can conclude is that, on average, our economic experience was modestly worse than average. The OECD average decline for the quarter was 10.6%. Our experience was notably worse than Australia’s and large chunks of Asia but much better than the UK.

"But before we can draw too many conclusions, we must wait to see how things unfold from here. Take Australia as a case in point. There is no doubt Australia outperformed New Zealand in Q2 but we suspect, thanks almost exclusively to the Covid problems in the state of Victoria, that by the end of Q3 New Zealand and Australia’s performance will be not that dissimilar. In the longer term we suspect the two key determinants of relative activity will be the effectiveness with which nation states contain Covid-19 and the extent an economy is reliant on tourism. At the moment we are ahead on the first determinant and behind on the latter."

This is what Statistics New Zealand had to say:

Gross domestic product (GDP) fell by 12.2% in the June 2020 quarter, the largest quarterly fall recorded since the current series began in 1987, as the Covid-19 restrictions in place through the quarter impacted economic activity, Stats NZ said today.

“The 12.2% fall in quarterly GDP is by far the largest on record in New Zealand,” national accounts senior manager Paul Pascoe said.

Measures to contain Covid-19 have led to historically large falls in GDP in many parts of the world, with countries’ results reflecting the nature and timing of their responses, and the structure of their economies. For example, New Zealand’s result compares to falls of 7.0% in Australia, 11.5% in Canada, 7.9% in Japan, 20.4% in the United Kingdom, and 9.1% in the United States.

New Zealand started the June 2020 quarter in alert level 4 lockdown, with strict restrictions on the activities of both households and businesses. On 8 June 2020 New Zealand reached alert level 1, which saw the removal of physical distancing requirements.

“While level 4 restrictions were in place for most of April, the gradual return to level 1 over the course of the quarter meant that businesses were able to open up again and many people returned to places of work,”  Pascoe said.

New Zealand’s border closed to incoming international travellers on 19 March 2020 and remained closed throughout the June 2020 quarter.

Some industries were more affected than others by the border closure and alert levels restrictions in place during the June quarter.

“Industries like retail, accommodation and restaurants, and transport saw significant declines in production because they were most directly affected by the international travel ban and strict nationwide lockdown,”  Pascoe said.

“Other industries, like food and beverage manufacturing, were essential services and fell much less.”

The majority of construction activity and some of the manufacturing sub industries were deemed non-essential and so temporarily shut under alert level 4. Construction declined by 25.8%, and manufacturing fell by 13.0%.

The fall in production was paralleled by declines in household spending, which fell 12.1% over the quarter. Expenditure on household services such as domestic and international air transport and restaurant and takeaway meals fell sharply. Exports of travel services declined, as international visitor spending fell after the border closed.

Annually, GDP fell by 2.0%. This is the first annual decline since the March 2010 quarter.

GDP per capita fell by 12.6% in the June 2020 quarter.

The speed and scale of Covid-19 response measures presented a number of measurement challenges in the June 2020 quarter. In compiling estimates of GDP, Stats NZ has used additional data and analysis to respond to areas where the standard approach has limitations. This additional work means that the impact of Covid-19 over the course of the quarter is accounted for as accurately as possible to produce reliable first estimates of GDP.

“Today’s results represent the first official estimate of overall economic activity in the June 2020 quarter” Mr Pascoe said.

“As always, we’d expect to refine and revise this initial view as more complete data becomes available. This quarter is clearly not business-as-usual and there is generally a higher level of uncertainty associated with measuring such significant changes in economic activity. We have used extra data and careful analysis to minimise this uncertainty and provide a reliable first estimate for the quarter.”

GDP estimates will be updated as more detailed but less timely information comes to hand. This is in line with standard practice in New Zealand and internationally.

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125 Comments

All factors considered, that’s a pretty good outcome.......

We’re a resilient little country, punching well above our weight.

TTP

21
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Maybe you missed this bit "For example, New Zealand’s result compares to falls of 7.0 percent in Australia, 11.5 percent in Canada, 7.9 percent in Japan, 20.4 percent in the United Kingdom, and 9.1 percent in the United States"

12
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The final whistle has not been blown. More quarterly GDP prints to come ... NZ having opened up its economy in Q3, whilst Australia's state of VIC (contributing 23% of AU's annual GDP) has been in lockdown for much of this quarter. Same in the US.

It is difficult to compare quarterly figures between countries given the different timings the outbreak was impacting each country. Two or three quarters together should help make for more accurate comparisons.

HI Apex Andy,

Before you knee-jerk your way into the debate, you ought to consider the COVID-19 death statistics in the countries that you list in your comment above......

TTP

We had one of the strictest lockdowns in the world, and then eliminated the virus. Lets see what the Q3 results look like amongst these countries, shall we?

That would be comparing apple with apples then.

...... for the virus to come back.

Bad luck Lan the Oxford group are finding otherwise against your position.
The correlations go the other way.

https://youtu.be/OQ4bfsElVNs
N Ferguson

NZ can't be compared to Australia, because we have totally different economies. A large part of NZs is tourism, which Covid has killed, and there is nothing NZ can do about this. Tourism is dead all over the world as a result of Covid. Florida has been open but their tourism is down 80%. But look at Australias rise in unemployment compared to NZs. Australia's is terrible. Australias housing market also doesn't look great compared to NZs.

Correct GR is a terrible comparisoner.
You could say shameless.

22
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..spoken as if it's all done and dusted and we passed the test.
Nope...we just pumped out $13 billion and now have most of the country getting some form of govt handout, be it benefits, super or govt/council employed.

15
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I was made redundant from the private sector. I applied for a government job last month, I just missed out, I was devastated.
Like a suckling at its mother's bosom, the government jobs nurture, protect and shield the lucky few from the horrors of the world around them.

13
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Sorry to hear that.
I think it's a disgrace that the government has not commenced a review of it's highly wasteful Wellington bureaucracy (I'm not talking about front line staff, who are often clearly under resourced)

I had a poor experience contracting with a crown agency's analytics team. A few colleagues in the team had landed the role a few years ago thanks to a redeployment programme following an organisational restructure.
Good for the candidate in going from admin to analytics but most of them were so comfortable in their new role that they never upskilled themselves to fit into the mould. As a result, the bulk of the team's workload fell on the ones who were skilled in analytics, while these glorified admin workers tinkered around the edges to appear relevant.

Unsurprisingly, the team to-date experiences a high staff turnaround of those that actually care to contribute. I blame the management culture for such shortcomings; most team managers are also too secure in their position and can't be bothered having to take action against non-performing staff.

Stay positivr mate. Its temporary.

I can speak from experience.

Good luck to you.. Hopefully brighter days are coming.

Auckland Council have cut quite a few staff, second only to Air NZ

24
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NZ had a once in a generation chance to alter the course of the economy with the tens of billions borrowed. There could have been transformational tax alterations, a continuation of the 30% LVR restrictions, substantial investments into new hospitals, creation of tax free export hubs, fix 40,000 kids needing breakfast each morning etc etc etc etc. They chose to entrench an unproductive part of the economy through subsidies. What will happen now is Australia will streak ahead in living standards and we will have compounds like South Africa. Ironic in that this was why the Safa's are coming here. I hope you like Uber drivers and liquor store managers.

20
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The government shields and protects the specuvestors like they are kings? They are the ones who risk our banking system and economy in search of eternal risky profits? The corruption from Labour is deafening.

After the election, opening up the border will be the first thing to happen.

Open up property market to foreign buyers to import fresh money into economy instead of borrowing and recirculating money.

Haven't we learnt anything?

I thought it would be close to 20% at least.
Guess keep spreading Covid Relief money worked.

I suspect very much it's actually significantly higher than 12%. Michael Reddell has written well on how these estimates can be a moving feast.

51
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I cannot believe we are still wasting our time being concerned about silly little things like GDP growth and jobs when we have record high house prices. We will just sell houses to each other at ever increasing prices and come out the other side smelling of roses. Stop worrying its all under control.

House accumulation has much to do with snobbery.......

It’s become an all-to-obvious measure of social status in NZ.

TTP

33
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Someone's account has been hacked !

15
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Either that or the bipolar has set in again

15
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Not often I agree with you TTP - but you're right about this!

Absolte hog wash! It's not status, it's a way of making a buck and we all know that there are precious few other opportunities out there other than housing.
A status symbol in a lot of people's eyes iis a flash car, I dive an old dunger but I'm guessing I'm better off financially than most driving a flash car on tick.

Housing demand will continue to grow. It's more due to its ability to provide better returns than most other investments in NZ.
You're lucky if you're getting 1% on a savings account at the moment, the share market is highly volatile, which leaves property a sensible alternative.

Exactally mate, how that got turned arround to a 'status symbol' is beyond me. There was an articial on here yesterday that houses are the only bright spot in the NZ economy.

15
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a 'bright spot' for some', a dark spot for others, and a drag on the productive economy and equality ...

Yeah mate that is true but to say it is 'snobbery' is leftist PR. it is the best and basically the only game in town.
Don't blame the player, blame the game!

I think this goes beyond left Vs right. There's plenty of lefties in my local area that are very snobbish about their homes. Plus, it's pretty clear the left or right will support property at all costs (from me, a disgruntled previous Labour voter).

Leftist 'do as I say, not as I do'. Is very strong at the moment.

10
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It's the current crop of politicians: all pretending they have an economic plan for the country's future but when it comes down to it they take Treasury and RBNZ advice: it's house price inflation and high-volume immigration and we don't have much else, just do it.

Wonder what they're all invested in.

TTP leftist????
I agree, most of the time it isn't snobbery, but it probably is often greed...

If I build a house and rent it out or sell it, I'm a greedy pig but from what I see the Gov't isn't stepping up and getting done while spending mega attempting to do so is acceptable.
So if I'm understanding this correctly, NZ needs more houses to house people and to bring the price down but if I actually get off my ass and expose myself to the risk in doing that I'm a greedy pig?
The houses I build are over spec, I can build for less cost than the Gov't, so I add extra insulation and better equipment. When I hear that I'm a greedy pig it pisses me off, I may as well do the bear minimum if I'm going to be the a'hole anyway. Counter productive to what NZ wants I would say.

Good on you for adding to supply, Kezza. If only more were, eh. Including the governments.

What I dont get is if I do so, I'm a greedy pig and a snob.. WTF?

It's not the people building houses that's the problem Kezza - more houses is exactly what we need, and a lot of potential FHB aren't in the position to build their own. It's investors outbidding FHBs for existing stock that are the problem.

To be fair a lot of FHB are too picky for their own good. In Christchurch, you can build a new home for the same price as existing stock on the outskirts of the city or get a brand new smaller townhouse that is more central. Hard to find both if you're on a FBH budget.

People need to give up on the 1/4 acre dream in a city, it's not how the rest of the world is and we still have it really good compared to a lot of other countries.

Why do you think FHBs expect to be able to buy 1/4 acre dream in the city??? You must either know some really rich or really deluded first home buyers. All the people I know who've bought recently have been buying do ups in the outer suburbs cause that's what they can afford (just).

Are you the incarnation of TM2???

Crucial words -- "In Christchurch"

Blame Labour for not doing anything about it then, they have had three years to take it on and failed miserably.
We are headed into arguably one of the biggest crisis ever and we aren't standing up and holding Labour accountable which basically makes it acceptable for them to fail again.

Greedy wasn't directed at you.
It's to the speculators who build large portfolios (rather than new homes like you), effectively at the expense of FHBs.
Having said that, the government incentivises it....

Labour has had three years to change that and failed, while their own minister also own houses.
National allows it because that is what Natuoal dose.

Here is how building a house plays out if you need a loan.
Hi, we want a loan and then once it is built we're going to sell it and pay the loan off.
Sorry we will not fund this.
How about, we build it and keep it forever?
Well certinally yes, how much do you want.

Then I want to do it again. If I sell it I loose 30% on the profit. I'm forced to keep it as its makes better business sense and borrowing again eaiser.
I sold up as I dont like debt but the path of least resistance is to keep them and build a portfolio.
The bigger developers get to do spec houses on loans but it's very hard to cut the deal a a smaller guy.

Rock and a hard place.

Hi Kezza,

A previous landlord used to tell me and his other raked-over tenants that he now had "over a dozen rentals" and how hard he worked "to keep my portfolio going". That's the sort of talk that got him off.

Do you think we enjoyed listening to this sort of crap from a fat pig who drove a late model Mercedes c200 - and needed braces to hold his trousers up?

He was more into social climbing than being a responsible landlord - used his "portfolio" of damp, run-down flats merely to inflate his ego and cement his status as a "property entrepreneur".

TTP

One person. The exception to the masses.
I've had rentals and didnt like it much. It's about getting from A to B for the majority. A lot of the people who have rentals that I know are meek and mild and doing what they do as it's the best way forward.
Politians and stautts symbol, while pretending that it isn't the case is something.

Classic Kiwi attitude: has no clue how to invest elsewhere so concludes that property must be the best and only option. I've been investing for a little over three years and my share portfolio is streets ahead of the property market.

Well often those that express concern about snobbery outturn as great snobs themselves. Hence my house is bigger than yours. Understandable and/or excusable to some degree in the immature years but pathetic when senior, where unfortunately it is far too prevalent.

Much to my wife's horror, I'll keep rocking my Red Band gumboots everywhere including to the lawyer / bank and other such meetings.
She keeps saying to me that I need to show respect entering their world by dressing accordingly. I'm in the start low and finish high mindset. If they have an issue with my dress since, I don't want to do business with them.

I've never supported landlords who oppress their tenants by providing sub-standard accommodation - and I never will.

If you're going to make money from property investment ok - but don't do it by raking over other people.

Ethical standards are as relevant in property investment as in any other type of business.

TTP

As always there are a'holes out there. My wife and I went to a house letting agency as we are way to soft to deal with sob stories.

Property has directly contributed $29.8b to the economy in the 2015-2016 financial year, employed 160,800 people and in the past 10 years has overtaken manufacturing to become the country's largest industry.

The industry's direct contribution accounted for 13 per cent of New Zealand's gross domestic product (GDP) - ahead of manufacturing's $25.2b (11 per cent).

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=118...

12
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Forget the FIRE economy, NZ has become FA but RE.

15
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What an abject failure of thinking and economic policy.

John Key in 2007:

We face a golden opportunity to become a more prosperous country. The Internet is bringing New Zealand businesses closer to international markets. Demand is booming for the commodities we produce... As it is, we see some major issues with the fundamentals of our economy that could prevent New Zealand from making the most of our future.

We are facing a severe home affordability and ownership crisis. The crisis has reached dangerous levels...This is an issue that should concern all New Zealanders. It threatens a fundamental part of our culture, it threatens our communities and, ultimately, it threatens our economy.

...we need government leadership that is prepared to focus on the fundamental issues driving the crisis. National is ready to provide that leadership.

Key abandoned his campaign rhetoric and denied any crisis existed. He failed.

The Reserve Bank remains absolutely committed to pushing prices up and devaluing hard working Kiwis' wages.

How about some real economic policy and leadership from NZ's politicians and central bankers for a change?

'How about some real economic policy and leadership from NZ's politicians and central bankers for a change?'

You would think that would be a reasonable expectation...but we have been bereft of that for many years

15
up

Exactly, too many doomers on this sub. Can't afford to buy your kids dinner? Who cares, your house price went up 4% last quarter.

15
up

I agree....and even climate change is so yesterday.
We have the housing market to save us, hooray!

Not surprising that a record fall as Level 2 and 3 lockdowns have been the most extreme economic events.
That was induced by choice and not systemic and is now in the past.
The two most important things are now what will the impact be of an on-going Level 1 impact be which is likely for 18 months, and will further outbreaks mean that we will be forced back into higher level lockdowns.

No one forces us into lockdowns.

yep.
The strange flip flop antics of the PM over the rugby, first the loss of R Cham, when she say ran the best (world will run to our door) health response, flipped her. To flop for the Bledisloe cup matches over quarantine.

NSW runs better quarantine & isolation operations than than her. Gladys has design NSW operations better than the PM. Its there for all to see.

If this was pony club, we are watching the novice event.

13
up

She's a centrist / populist, who will flip flop for populist reasons.

Little credibility.

Just another politician, in other words.

She is empathetic though, which is nice, but doesn't mean much for a country's current and future wellbeing...

John Key could be empathetic too.

Not so sure about Crusher Collins and Bulldozer Brownlee??

TTP

GDP down, but the Current Account was in surplus. So does that mean we are better off with fewer tourists and lower immigration?
If so, then maybe we are focussing on the wrong statistic.

Remembering that no one has been able to leave -- maybe our chronic love for overseas travel has been extracting relatively more money from the economy than we thought, relative to what comes in from inbound tourism?

People can leave though, more people left last month than came in.

Good point. I think the virus has forced us to restrategise our economy in ways we wouldn't have otherwise.

The tens of billions committed by our public sector in new spending at various project stages on building infrastructure, reprioritising local sourcing, upskilling retrenched workers, industrial & scientific research, agri-tech focus and regional development should hopefully make us less reliant on low-value sectors relying on mass influx of people going forward.

Yip - its all that non consumption - terrible for debt & promises but great for all other species on the planet
The economy is a waste maximisation machine
The more, the better
Green and economic growth is an oxymoron

House prices up 12% since last week!

5% since this morning

11
up

Auckland RE is up 30% since B&T Ponsonby opened their doors this morning! It's the new Tesla.

The new tesla? so expect 33% falls in 8 days? Lol

GDP would be 1.5 millions better off if people paid the fine.

Rake in all the unpaid court fines, student loans? Approx $ billion ?

Hi Chairman Motor Moa & Foxglove,

Payment of fines is a transfer payment.

Transfer payments don’t impact on GDP!

Time you got yourselves educated.....

TTP

why so touchy?

Because you're so ignorant.

TTP

Sorry..
but people lives in glass house shouldn't play with big stones!

Reminds me of Chalky, a la Giles cartoons. Best we then pad our backsides for inevitable caning.

Hi Foxglove,

Since you suggest it, a backside walloping for yourself and Chairman Motor Moa is not such a bad idea.....

TTP

Don't come in dry!

Sounds kinky

You'd know all about "Payment of Fines".

Give it another 6 months or 1 year to see how the economy really performs, just heard the the border control wont be lifted until 2022. It’s hard to see how this will exactly impact housing markets. But things are definitely not looking good.

12
up

The Hair Trigger RBNZ will probably use your comment as a reason to drop the OCR into negative territory.

They can drop it as much as they want, but it has been approved that lowering OCR is not working, it’s only pushing assets price up and it does not benefit our economy. We had OCR droped from 1.75 last year to 0.25 this year. What do we get in return in terms of GDP growth? The GDP annual growth had been constantly dropped from 3.4% 2019 March to -2% today. Seriously, Adrian Orr should resign.
https://www.stats.govt.nz/indicators/gross-domestic-product-gdp

'it’s only pushing assets price up and it does not benefit our economy'.

I'm not so sure about the second part of that statement. If people are paying less on mortgages, then (provided they haven't lost jobs / income) they will have more disposable income, to spend in the economy.

I suspect most with mortgages will just play it safe and pay down debt, people seeking returns will likely favor further housing speculation as long as the upside continues. Asset inflation also means new entrants to the market will have their discretionary spending curtailed for a long time due to the increased size of mortgage they now have to sign up for thanks to Orr and Co.

Also neither National or Labour have any plans on how to fix this housing crisis. It is even more of a housing crisis than it was previously. If done right, Kiwibuild potentially could have helped, by fixing house prices to a certain level for first home buyers. But I couldn't see that ever happening.

Are you sure about that? New Zealand consumer confidence hit lowest since 2008.
YoY retail sales were down 14.2%.
Disposable income wont easily just go into spending. With this low interest rate, it will just go into housing again since assets price is still going up. I’ve already heard some of my friends are taking the advantage of low interest rate and try to save more for another property.

Well, all those things will happen including some people spending more in the economy.
I am not at all saying ocr cuts are a silver bullet, but they do have some economic benefit (and cost). How much is the big question

Retail is definitely up. Particularly on big whitewear. I often wonder why they dropped the LVRs if the interest rate drop was only to improve spending. The combination of low interest and low equity lending is sending asset prices sky high.
A further drop, after what they surely now realise, would have to be accompanied with some borrowing restrictions.

Wonder why they mentioned 01st January 2022 when borders will be opened and why not 31st December 2021 - may be for affect or ......

"It’s hard to see how this will exactly impact housing markets. But things are definitely not looking good."

Depends on whether you're on the buy side or sell side.

Or the use increasing equity to borrow more side...

I get the feeling Statistics NZ were specifically told not to use the R word in todays statement.

YoY turnover in our main business is up, despite a 40% dip in April. We are in a supposedly recession sensitive cyclical segment supplying construction but home renovations seem to have become a primary activity for travel constrained boomers who are spending up a storm on expensive fit outs and gear. Tradies are paying on time, margins remain good. Our financiers tell us it's a counter intuitive but common story. Calm before the storm maybe but little sign of clouds just yet - apart from a notable increase in applications for vacancies.

10
up

I'm in construction (commercial sector). Most people seam to have enough on till the end of the year, but nothing starting next year. I think things will take a turn for the worst in the new year.

Donny, do you feel that's existing jobs being completed but new jobs being mothballed ?

The planning part is weak even lawyers jobless.

Yes

11
up

Hey just a though...

Why not let the free market decide the price of money and interest rates?

Because most people would be debt prisoners.

Because it isn't a free market.

Because not everyone is coming off an even footing. The people who caused the problem will just cash out, they're already miles ahead. While young people starting out with families etc would be the ones who end up taking the damage. Suddenly deciding to let the market do its thing after years of crippling it to the advantage of certain cohorts is saying the quiet part loud.

Free market is an idea, not reality. 'Free market' is a euphemism for a small group of players, usually not visible to the majority, who have controlling interest over the supply side of the equation, flex their powerful position to gain undue advantage at the expense of all others.

No wonder more successful national economies, including Singapore, have varying levels of control over their markets to keep them from dysfunctioning.

It does.

ANZ was forecasting 12% on 10 September.
Just goes to show that these bank economist bunnies have no idea at all.

But the DGM's record has been far worse than that of bank economists.

TTP

Housenesian Economics:

Housenesian economics, named after housing apologist Tony Alexander; are various macroeconomic theories about how, in the short run – and especially during recessions – economic output is strongly influenced by rising house prices and how even once in a century recession cannot stop the housing market. Various governments have now accepted that house prices will rise infinitely and can scale back investments in manufacturing and other seemingly useful economic activities. Current Government macro economic theory is also supportive of this approach due to the channeling of $$$$$ billions of future millennial wealth and generational prosperity to prop up said activities.

My Google Ad for this page:
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I'm tempted to ring and ask them for the best timing to purchase a home.....

Mine was "Unleash the value of your property"

I have had a very nice looking, mature Chinese real estate agent a few times
Ha!

Mine is 'Reshape your career at MIT, the Manukau Institute of Technology' along with a piccy of a chap operating a peice of machinery.

Michael Reddell focuses, not on the Debt or the Growth as such in the PREFU, nor on the confirmed (more or less) contraction via the latest Stats haruspicery, but on the permanent loss of activity that will result in NZ Inc being poorer than it could otherwise have been.

Over those five years [2019-2024], Treasury now expects the value-added from all production in New Zealand will be $140 billion less than they thought just nine months ago. (For what it is worth, there is another $200 billion lost in the following five years, a period Treasury does not forecast in detail). These are really large losses, and on the Treasury numbers the associated wealth is never being made back.

this will be a short recession as we come off a very low base and the economy was opened up to level one so the next quarter will show a jump before going back to negative for the last quarter.
as for recovery i think australia have better ideas than else where to put there spend
The federal government will consider economic modelling behind a $25 billion plan to create 1 million climate-friendly jobs to spur a recovery from the COVID-19 pandemic and make the nation a "renewable energy superpower".
meanwhile our two major parties just want to build houses and roads

Govt wage subsidys are yet to wind up. Borders to stay closed till 2022. Trump looking to stay. Brexit rubber hitting the road soon. Businesses all screwing their suppliers down. Buffett bailing US bank stocks

But it's all good.

I asked the other day but didn't see an answer. I thought the wage subsidies ended at the start of September?

I think that's when you stopped being able to apply for it. So in theory (if you applied at the last minute) you could still be receiving it up til the end of October.

Compared to a lot of europe, this isn't bad, with many countries figures worse than NZs. Plus we have only had a few deaths, unlike almost all other countries. What price can you put on that?
If we go back into level 1.5, and fix the holes in the border, we could do a lot better than europe in the other quarters. But we are always going to be affected somewhat, due to putting such a reliance on tourism, and international tourism is dead all over the world.

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