90 seconds at 9 am: Tough budget predicted; property a sellers market; EU manufacturing falls; US and China manufacturing rises

Here's our summary of the key news overnight in 90 seconds at 9 am, including news that yesterday's Crown Accounts to February and the related monthly update on Treasury's outlook now mean the Government will need to deliver a very tight budget indeed if it still wants its revenue to exceed its spending in the 2014/2015 year. The tax take is falling below previous estimates and the Prime Minister has signalled that a 'zero budget' is what they are targeting in May for the 2012-2013 year to try and keep a lid on the current run of deficit spending. We have more on this story online.

The March update of the Property Report is out and that shows the New Zealand property market is very much a sellers market. Inventory levels have fallen again, and in thirteen of nineteen regions "sellers have the power" says Alistair Helm of realestate.co.nz. There is much more detail on the website and we will have an interview with Alistair Helm going up soon with more analysis.

Meanwhile overseas, unemployment in the Euro-region rose to the highest in more than 14 years and manufacturing contracted for an eighth month, adding to signs the European economy probably slipped into a recession in the first quarter.

In contrast, across the Atlantic manufacturing in the US expanded at a faster pace in March, driven by gains in employment and production that signal the world’s biggest economy is underpinning global growth.

The US news, combined with positive Chinese manufacturing data, has seen 'risk' settings return to markets. The oil price has recovered as quickly as it fell last week along with gold and the Dow, and the Kiwi dollar is back up to US$0.825. The thirteen week gains the Kiwi dollar had racked up vs the Aussie dollar looked like they were ending yesterday, but in overnight trade our currency resumed its climb back towards the AU$0.80 mark.

We will be watching today's RBA rate review announcement closely and will have an update at about 4:30 this afternoon.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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US/ China manufacturing positive - really good news - or just main stream propaganda ??
One has to be very careful with so called “positive signs” of manufacturing.

We have a man...(loosely)..at the helm of the good ship Flounder.
 Now his experience and ideology is based in the non productive speculative markets.
 The imbalances arising at momentum in the E.U. between the speculative market and the productive sector have surpassed critical point  to a ridiculous situation of "well lets just pretend that it's alive shall we"
When bloggers here say John boy has no clue how to restart an economy  they are absolutley correct (I believe)..simply based on a genuine lack of understanding in the productive sector.
By default he (John Boy) will remain a muppet to a banking system that has little interest in productive development through science and innovation. That is to say the Banking system here is no different to those that lend to them  and those that lend to them and those... ad nausem.
The property bubbles supported by the banking industry ( i.e.Spain etc.)are fair reflection  of that industry to....change it's ways....look to correct imbalances...re- think  where rampant speculation  vs productive  investment  has led the Global Economy to.
I am satisfied the P.M.'s interest in the sale of S.O.E.'s and Mining Development  will be of a speculative nature rather than truly growing industry  for N.Z. because... that is all he knows.
He demonstrates a real naivety sometimes in suggesting N.Z. will escape the misfortunes of  the E.U. and the U.S., and yet the very path that took them there is the one he chooses to repeat.
 Yes N.Z. does have to reform it's entitlement thinking......but so too does it need to reform it's attitude to productive investment.

Good comment Christov. Some ministers and the PM don’t understand that manufacturing here in NZ is not only the key for long term success in our economy, but also for decent jobs and low unemployment. Particularly now in difficult times the government cannot be allowed billions of infrastructure needs to be planned, researched, produced, installed and maintained by foreign companies/ workforces.
I increasingly have my doubts, that a former wood- turner, a former FX trader and a former hospital bed sales person are capable of leading our economy in the best interest of the nation.

I hear you on that Walter......stay well.

Who was the hospital bed sales person?

Gareth - after the election, Steven Joyce was quick to rebound. He became the director and then chief executive of Jason’s Travel Media and the chairman of hospital bed manufacturer Howard Wright

Christoff: thoughtful. abundantly clear. While you are in a reflective mood, would you care to define the attributes of a visionary leader who could lead the hoi-poloi from the front? As a start, can you recall the last one that had a vestige of leadership qualities?

I am afraid iconolast that outside of Sedden , and (before the meglomania took him) Muldoon I cannot. But I would say this , I don't see the "Leader" of a nation as wholey responsible for steering a path  to improve the livelyhoods( thus well-being) of a Nation. 
I do however see the ideology that is subscribed to by that leader as paramount in likely outcomes for the tenure.
 To be simplistic and direct about it,.... The Banking Industry of Australasia along with the Corporate monolith Fonterra have John keys ear....not the people who granted the Mandate.
The people of Christchurch must surely be concerned by now that Key and gang of three are  reliant on Corporate best practise intelligence being fed to them.
 There is not a practical man amongst them .
 That is I believe a fair assessment in respect to his experience  and the decisions he has opted for thus far.
 And so to answer your question....a group of individuals who while educated reflect  a practical and commonsense approach the the management of an economy.....
In a business sense someone like Bob Jones...but could he tolerate a sit down with Garreth Morgan.....? could either stomach being called Politician....there is something  almost unpractical in the term itself.
Before any change in leadership there must be a determination on the part of New Zealanders to say when enough is enough.....and end to apathy. 

Christoff: I was in AKL for the month leading up to the election and just after. I came away with two lasting images of the state of politics in new zealand
One was the leader of the ruling party of the nation, sitting in a coffee bar, then rising to his feet, got his johnson out and gave the population a helluva warm spray of orange rain. Couldnt even get it into the teapot.
Second one was that hairy sainsbury muppet pontificating all he was worth every night. Trouble is the make-up people forgot to tell him to cut the carpet back from under his nose. Heard some noise but couldnt tell if his lips were moving or not. Should have had a signing interpreter standing beside him.
And that was the sum total of it all. Is that what the nation aspires to?

orange peko tea?

Ideas - seeking progress - means teamwork.

…and then is the question: “Do we really need one leader?” I personally think politics should evolve. In stead of stupid and senseless cock- fighting of parties, wasting time and money we need better solutions. In today’s complicated and competitive world - time is ripe for more teamwork.
A team, which consists of 5 members of political parties.
2 members of the strongest party and 3 members of the 3 following behind parties.

It may be worth noting that so called "best practice" is in fact entrained past practice.

Quite agree Colin R. and that was my inference on it in the above. Entrenched behavior on the part of indotrinated thinkers leaves a wanting in the way of innovative solutions.

Those indoctrinated thinkers are the same ones who cluelessly claim incremental technological advancement as innovation.

If its best practice it certainly should be proven....not , "oh I have a new idea and it sounds great".  Otherwise no I dont agree....but i suppose it depends on the sector in question because this isnt my experience.

An interesting counterpoint to the US manufacturing growth in March is the household savings rate fell 3.7% in February.  This would imply that the structural imbalances are recovering to previous levels as well.

European unemployment is a two headed beast with Austria, Netherlands and Germany around 5% and Span and Greece over 20%.  This 10.8% averaging doesn't really tell the story.