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Gross domestic product declined in the September quarter as household spending on durable goods dropped to a record low

Public Policy / news
Gross domestic product declined in the September quarter as household spending on durable goods dropped to a record low
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Source: 123rf.com. Copyright: jopanuwatd

New Zealand’s gross domestic product fell 0.3% in the September quarter, defying many economists’ forecasts for a small expansion.

In addition, Statistics NZ has sharply revised down previous GDP figures released during the year and revealed that we did in fact have a 'technical recession' earlier in 2023.

The December 2022 quarter is now recorded as -0.6% and the March 2023 quarter is now recorded at -0.2% (down from 0.0% as previously revised).

The figures for the June quarter were also sharply revised down from the earlier reported 0.9% growth to 0.5% growth.

In terms of per capita GDP, the September quarter saw a 0.9% drop.

The New Zealand dollar, which had risen by nearly US 1 cent early in the day (to over US62c) after the US Fed left interest rates unchanged and gave the clearest signal yet that there would be no more US rate rises, quickly gave up over a third of that gain to be US61.7c.

Statistics NZ said all goods producing industries were down during the three month period, with the biggest fall coming from manufacturing. 

Transport, postal, and warehousing industries also dropped as less goods were exported. 

Household spending was down 0.6% during the quarter with falls in all categories. The decline was driven by less spending on motor vehicles, after higher spending in June. 

Stats NZ said the June quarter figure was likely influenced by changes in fees and rebates that were introduced at the start of July. 

The annual increase in economic activity was up 1.3%, but that figure has been boosted by high rates of inward migration. GDP per capita has fallen 0.3% in the same period. 

Brad Olsen, chief executive at Infometrics, said the Reserve Bank’s interest rate hikes were beginning to overcome the demand from population growth. 

It was the worst quarter for household spending on durable goods since the pandemic, which showed the effect interest rates were having on the economy. 

“All the recent data is supporting the Reserve Bank’s outlook on inflation moderating, but no one should kid themselves that this data calls for rate cuts immediately,” he said. 

The Reserve Bank predicted a 0.3% increase in its Monetary Policy Statement released late last month, while the market consenus was slightly lower at 0.2%.

Primary industries bounced back from a weak June quarter, with a 0.6% increase. Healthcare and social assistance was another bright spot with a 2.3% lift in the quarter. 

Stats NZ said eight out 11 service industries saw growth during the quarter. Rental and real estate services were also strong.

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135 Comments

...they never broadly report the Per Capita number.

As long as the GDP rate keeps increasing they'll keep the immigration tap running.

 

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That and GDP per hour worked (productivity). 

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Worked hours are noise. 

Expended Joules might mean something; labour doesn't factor against fossil energy. 

Takes a while, eh? 

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PDK365 ?

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The number of employed persons in NZ has grown just over 28% since 2015 (whopping 3.5% per year annualised), mainly because of very high rates of working-age net migration into the country over the same period. However, real GDP per worker has only grown 1.9% over the same period.

These 2 stats plotted together should be raising major alarm bells among migration policymakers that we're no better off as a country despite importing people in droves, probably worse off considering the deteriorating living standards associated with such an oversized population increase that aren't captured in GDP calcs.

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the policy makers wont care until we hit a tipping point where the swing voters make the connection and are looking for improved standard of living...  and for a party to have policies that focus on that. its a bit of a perfect storm tho as people will be caught between cost of living, climate and public services.

 

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Well said sir.

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Policy makers only care about winning the next election 

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...they never broadly report the Per Capita number.

As long as the GDP rate keeps increasing they'll keep the immigration tap running.

Who is 'they'? Interest dot co clearly highlighted this above and how the NZ economy is relying on migrants as economic widgets right now.

The strange thing is that the representative Kiwi numpty (and there's a few lurking here) were laughing about Japan being an economic basket case compared to our superior economic model where they don't actually have to produce much. In reality, both Aussie and NZ are on par with or worse than Japan using share of GDP as a barometer.   

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"They never report per capita numbers"  Please read the article before commenting.

The annual increase in economic activity was up 1.3%, but that figure has been boosted by high rates of inward migration. GDP per capita has fallen 0.3% in the same period. 

In terms of per capita GDP, the September quarter saw a 0.9% drop

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I am pretty sure that second part wasn't there the first time I read the article. Did Dan do a ninja edit?

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Gee don't really like this NZ first government much.

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Well, who could have predicted that? Honestly, the data has been telling us this for 6 months - yet still RBNZ, Treasury, and all the usual media muppets have been predicting growth?!? If you think this is bad, wait until we get the next quarter's results.  

Now before all the interest rate folks get excited, I am not arguing to cut rates (the market will pull them down anyway). The answer here is not a restart of the housing ponzi. We need discounted credit and Govt investment to be directed to where it needs to go - into endeavours that will increase productivity, reduce households costs, build some houses etc. The chances of the current shower of idiot idealogues in RBNZ and Govt doing this are minimal, but let's hope they work it out soon or we will get deep into the doom spiral.    

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Govt has 4 years ... 1 max 2 years to show a result and have a chance to get reelected.

so - no time to do a proper job, best case is to relx immigration and hope the incoming money keeps us going.

now - if we had a dictator like the chinese we could have a real long term strategy (loss of freedom might be a bit of a pain tho)

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"Govt has 4 years".  Why is that, a term is 3 years in NZ?

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Now before all the interest rate folks get excited, I am not arguing to cut rates (the market will pull them down anyway). The answer here is not a restart of the housing ponzi. We need discounted credit and Govt investment to be directed to where it needs to go...

I can see them salivating at the mouth already - "low rates, we's rich!" they will be celebrating at the water coolers of reactionary thinking nationwide. 

Your idea about public investment of course makes sense but to think we're ever going to achieve anything significant on the scale of South Korea, China, Japan, S'pore does is impossible. Those countries I mentioned understood about infrastructure within the whole socio-economic development frame. They had no choice.

It's 2023. In terms of long-term strategic planning, we're just starting to contemplate the idea. This is one of the negative externalities the bubble has given us. Short-sighted vision and laziness. 

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South Korea, China, Japan, S'pore

Those countries have something in common that is abjectly missing in NZ - high national savings rates, particularly household savings. Most economists, if not all, concur that household savings is a good source of borrowing for governments to provide funds for public works and infrastructure needs. Businesses can also borrow those savings cheaply for fixed/growth capital needs that boost the nation's economic productivity. Moreoever, the interest paid by borrowers on these savings also go back into the pockets of households and remains within the economy.

That being said, if NZ households were to make better economic choices starting tomorrow (save more and spend less), we'd head into a deep recession since so much of our economy relies on a very high volume of low-value spending (lattes, takeaways, alcohol, retail, etc.).

This also explains our immigration conundrum - we want more doctors, software architects and engineers even though our economy needs a steady influx of low-paying workers to keep our oversized low-value sectors chugging along.

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Those countries have something in common that is abjectly missing in NZ - high national savings rates, particularly household savings. Most economists, if not all, concur that household savings is a good source of borrowing for governments to provide funds for public works and infrastructure needs. 

Correct. Also, Confucian values have helped these countries. They save for the good of their nation. The collective good. 

Unlike the drunken sailor approach (or should I say need instead of approach) to the economy of Nu Zillun.  

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It is of course, "quite difficult" to build up savings, when the average wage is low and the costs of housing or rent are extraordinarily high.

The housing market is by far the biggest single issue that will decide New Zealand's future prosperity, and the well being of the population.  Any party trying to perpetuate the current situation is dooming us all.   

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It is of course, "quite difficult" to build up savings, when the average wage is low and the costs of housing or rent are extraordinarily high.

Yes. My gushing about the Asian nations is not to suggest they're all cash rich. On the whole, most people are not. In the case of Japan, average wages have been steadily declining since the end of the bubble. But so has the cost of shelter. In some ways, they're better off than us. 

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"Those countries have something in common that is abjectly missing in NZ"  Population density!  This makes achieving the goals presented by Jfoe (which I agree with), a lot easier !

 

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By that phony logic, every Asian country should have state-of-the-art infrastructure compared to sh*tholes like Sweden, Norway and Finland that have lower population densities than NZ.

The population of NZ has grown by 1.2 million in the last 2 decades and nearly half of new arrivals typically make Auckland their home. Can you explain why it is so much more expensive to build infrastructure in Auckland today than it was in 2003 (even in real terms)?

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I agree with your general point - that infrastructure costs in NZ are insane, and the reason is more complex than just population density. Yet to be clear about facts, Helsinki is about the same population as Auckland and having lived in both cities I would say Helsinki has the higher density. Overall Finland has about the same pop density as NZ. 

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The residents of sh*tholes like Sweden, Norway, Finland and a lot of others pay taxes including CGT and therefore have superior infrastructures!

See: https://www.oecd.org/coronavirus/en/data-insights/tax-to-gdp-ratios

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Why do you call Sweden, Norway, Finland  sh*tholes? 

I've lived and worked in 2 and visited the 3rd for pleasure. I'd hardly call them what you did. Winter's are tough but make some friends and they're fine, romantic even.

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They're being facetious Chris

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It is SO frustrating. Honestly, we seem hellbent on becoming a third-world country. The irony is that the things we need to do (get off oil, local energy infrastructure, decent housing, fix the pipes, pedestrianise city centres, public transport infra etc) are exactly what we need to do from both an economic and a quality of life perspective; but, oh no, let's stick another lane on the motorway and fire up the housing ponzi.    

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Get off oil, replaced with what exactly? How are you going to build infrastructure without oil, with batteries????

Decent housing is expensive to build, it needs to be medium density and requires joined up planning with local government.

We had a "plan" to fix the pipes and we pulled that, well lets not dredge that up yet again.

Everyone has an idea to improve infrastructure until you actually have to start employing tradespeople at $100 p/h + GST with petrol at $3 per litre.

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The first question is one that we will have to answer in the next generation or two whether you think it's too difficult or not - probably best to start dealing with it while we still have fairly readily available energy. 

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We are not building any infrastructure without oil in the next 20 years. You can think whatever you want of course, that's your perogative.

 

 

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True. But if in next 20 years the oil built infrastructure was built to service none oil based transport etc rather than oil based then that would be real progress. 

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The original post was about building infrastructure for a future without oil, not giving up oil today, unless I am misunderstanding wildly. We would certainly use oil to do so - we may have a brief window to use the remaining fossil fuels to boost ourselves into a sustainable future. 

It'll be too late to think about it after we've run out. 

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Seriously, break out of your short-termist paradigm. We had a population of 2 million in the 1940s and 50s and yet we were banging out thousands of houses, building hydro dams, and pinging out railway lines left, right, and centre. Damn, we fought an entire war and still came out the other side building like crazy. Go back and look at the actual data from that period. Also look at the media records from the same era. For the first few years of building (in NZ, UK, Aus etc) there were naysayers everywhere (we don't have the skills / materials / blah, progress is too slow). But the Govts of the day persevered and once they got into their stride, built the capability, and ironed out the supply chain issues, they properly went for it. We are still relying on that infrastructure today.

As for getting off oil - it's a matter of planning. We get two-thirds of our energy from oil - so how much can we shift to renewables, and how much can we reduce our energy use? 

 

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We aren't in the post-war 1940's though are we. There are a plethora of changes over the years that make building infrastructure more expensive today.

Why haven't we gone back to the moon?

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It's not about the money, it is about being willing as a country to dedicate the planning, manpower and materials to the job in hand. That means having less people pushing paper (or emails) to each other, and more people learning how to do the things we actually need. It means buying big batteries for buses, and electric motors for trains, instead of wasting our current account deficit buying Teslas, petrol and jetskis.  

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Nothing wrong with people who can afford it transitioning away from fossil fuels.

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There is quite a difference between me driving a tesla and replacing our national water infrastructure with solar/hydro.

 

 

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While the ideology there is sound, we no longer have the stored energy for resources by means of good old native forests to rip out (unless we want to drastically change our environment and potentially weather impacts by doing so) and cheaply build housing such as was done in the 1940s-1960s. If we wished to plan for this today we could, all in treated pine which could be feasible. The biggest barrier I see is the old mentality and ways of thinking. Too many wishing for days of old and refusing to change either materially or in logical thinking.

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Zero red tape back then. 

You were allowed to build your own home with the help of your buddies. 

Builders were trusted to build to a high standard. 

Builders would start and finish a build prior to moving to the next job. 

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What we need is very simple:

1. Deincentivise all investment/speculation in EXISTING HOMES. I.e buying a second home = 30% tax on the purchase. 50% Capital gains tax when selling etc etc. 

2. Incentivise investment in NEW HOMES. This can be tailored to fit specific areas, like apartments etc in the main centres and houses in the regions. 

 

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They tried that with interest deductibility. Building costs exploded, GIB became impossible to get, people had to pay an extra 10-20% to get something finished a year late, assuming they could settle at all, yields are crap, sales fallen off a cliff, building industry collapsing, KO the last buyer playing a violin on the deck of the titanic.

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You think that building costs exploding and supplies being impossible to get were due to interest deductibility?

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Building costs exploded and supplies dried up because demand for building materials exploded.  This was a function of (a) cheap credit and (b) tax changes that funnelled all new investors into the new build market to compete with FHB who were also fuelled by cheap credit.  You don't just change the demand dynamics and expect supplies to double overnight with no increase in prices.

"Up until the end of the 2021 calendar year we were managing the elevated levels of demand we were experiencing. However, during the December/January period our annualised order rate doubled, representing a market activity level in excess of 80,000 residential consents."

https://www.gib.co.nz/gib-news/gib-update/plasterboard-demand-and-suppl…

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Spot on

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Beautiful yet sad comment 👏 

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Jfoe, can you setup your own party and run for PM, please.  LOL.

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You know what helps growth and productivity - investment in infrastructure like a strong transport link between islands.

You know what doesn’t help growth and productivity - tax cuts for landlords.

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That said the govt needs to send a strong message for govt departments to stay in scope and on budget.

Doubling the project cost with no guarantee to stay inside the new budget frankly gives that department the impression of being a bunch of clowns with no respect for our money. i would definitely fire the board too. 

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That's right the business case would of been done on a ROI (maybe not under labour going on what is coming out) but if it was and then they come back with over double the expenditure then the business decision at the start would of been different. There has to be accountability by the board, senior managers etc for this, 10-20% may be acceptable but double/ triple is just incompetence. 

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It is strategic infrastructure. You can’t just make decisions based on do we need it tomorrow otherwise you get Auckland. Wait to see how much money bleeds out sustaining replacing the existing fleet.

National didn’t make this decision with a better plan, just like they didn’t cancel Onslow with a better plan. They are just going to wing it because they now they’ll be there for 3,6,9 years and in 2032 when someone is asking why is it costing 5x as much to fix this issue than it would have in 2023, it will be Labour’s problem.

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Here’s a thought experiment. List all the infrastructure projects New Zealand built but shouldn’t have. Now list all the infrastructure projects New Zealand didn’t build but should have or should have built sooner.

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All the cylce ways, funded the councils to update the 3 waters sooner.

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I'm interested here - do you think people shouldn't use bicycles, or do you think it should be reserved solely for those brave enough to share a road with vehicles that frequently threaten to kill them? 

I don't mind biking with cars around but I think I am in the minority. 

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Add motorcycling to that list. Completely invisible to most people even with high-vis and bright red bike. 

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We need to realise that NZ is broke, bankrupted by the previous Govt.  Not only do we have no money, but we will be paying for all the borrowed money that was frittered away on God knows what by Labour for decades to come.  This is going to involve all of us accepting a much lower standard of living, and none of the nice to have things that first world countries can afford.  We are truly going to become Aotearoa, another impoverished Pacific Island nation - the rich country we once knew as New Zealand is no longer.

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What are you talking about KW? Broke? Bankrupted? We're like one of a handful of advanced ecomomies with a net financial worth! Jeez.

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Do we though?

The only way to fix the infrastructure issue is a long-term bipartisan agreement between Labour and National so we can avoid the stop/start political whipsaw. This would also keep that nutters like the Greens neutered because they will not like what needs to be done, so they can leave the country.

Lab/Nats can campaign on whatever policies they want but they do not touch the infrastructure agreement.

We need more and roads, to dredge harbours so more ships can get in etc. We could also start State manufacturing of critical building supplies to drive the price down.

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It would appear we were already "broke" and morally bankrupt long before the previous Govt.  We frittered all the borrowed money away on houses and tax avoidance.  We'll be paying for that for decades to come.

What is this lower standard of living you're afraid of?  It would appear most first world countries can't afford the nice to have things given the level of debt, environmental pollution and inequalities required to maintain them.

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KW - bollocks.

And you have had every opportunity to know better

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We need to realise that NZ is broke 

Simply because we have a high cost of living currently and the wealth effect is under a hangover from the lofty highs of artificially juiced housing, doesn't mean we are economically broke. 

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This is the outcome of telling companies "we dont want oil/gas exploration." and nuclear is out of the question.Its MBIEs job to look at all options.

In France, unlike in America, nuclear energy is accepted, even popular. Everybody I spoke to in Civaux loves the fact their region was chosen. The nuclear plant has brought jobs and prosperity to the area. Nobody I spoke to, nobody, expressed any fear.

https://www.pbs.org/wgbh/pages/frontline/shows/reaction/readings/french.html

4. A political environment generating uncertainty around investment in gas production

Government had expressed a clear desire to transition New Zealand to 100% renewable energy, including ending exploration of offshore gas. The uncertain pace of this transition limited the confidence of the market to invest in development and maintenance of existing infrastructure

An increased cost of carbon

https://www.ea.govt.nz/projects/all/review-of-2021-dry-year-event/#:~:text=The%20'dry%20year%20problem'%20is,provided%20by%20thermal%20fuel%20generation.

 

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The Green's aren't even a proper green party. They are big state socialists who could care less about the environment other than as a means of controlling the population.

The fact that more than 1 in 10 Kiwi's votes for them shows just how doomed we are. That or Luxon or Hipkens, Jesus that's depressing.

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Nuclear works, we know this, but again a finite resources is needed to fuel it, and we have the added geographical challenge of natural disasters, storms, tsunami risks, earthquakes as the largest issue. While it may be an efficient generator of electricity, we have more challenges than France in implementing a nuclear strategy, and a very high risk profile should a plant ever have a catastrophic event which would render a portion of NZ useless for millenia.

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They should replace the boats like for like, not go off on some unauthorized spending spree and act shocked when their wrists are slapped. Did the last government check anything

 

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Given the disclosure but the Auditor General that $15 billion was spent with large dollops either unexplained or untraceable it is clear those doing the spending were not expecting to be reined in and it is not to their liking. Cutting back wilful extravagance is hardly the same as reducing public services.

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it was not the ship costs that blew out it was the land and berth replacement costs , even if you replace the ships you still need to upgrade the rest if you want to run a decent service, 

in saying that i would like to know why we have to have ships that take both rail and cars and trucks and not just a smaller separate ship just to carry just the rail and does it need to go to picton or could you just ship straight to christchurch, have they looked at all the options 

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Bless. Sharetrader pointed out the obvious. Why cant we chuck a car on a ferry in Welly and get straight to Chch or Dunners? And why cant we have a ferry that just moves people....with buses and hire cars at each port? Anybody?

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I didnt realise the ships were so much larger and more capable. They would run on battery in harbour. How was the shore project pricing so out of whack? Zero discovery from the project vendors?

These hybrid-electric ferries will play a key part in supporting KiwiRail’s goal to reduce carbon emissions by 30 per cent by 2030 and be carbon neutral by 2050.

The new ferries will transform the Interislander experience for travellers and commercial customers, offering enhanced onboard services including accommodation, entertainment, food and beverages. They are expected to cater for 30 years’ of freight and passenger growth, carrying twice as many passengers as the current three ship fleet, 300 per cent more rail wagons and almost double the number of trucks and other vehicles.

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They were trying to futureproof the service? No wonder they got smacked down - that's not the Kiwi way. 

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It is short-sighted foolishness and an indictment of the lack of long-term planning in NZ. spread the costs over 30 years then and forecast inflation at 3% then factor this cost in 10 years time and surely it would be far more worthwhile fronting the cash now and getting the ships and docks in place. Then add the profit from extra freight capacity and passenger capability, increased population predictions, it is investing in our future.

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$500k house, $400k loan. With no deductibility and standard rates, insurance, maintenance and PM, 2 weeks vacant, my "thinking out loud so allow a margin of error" back of a napkin maths shows roughly $750 pw to break even on interest only. Closer to $1k on a P&I mortgage. Reality is closer to $550 pw rent. 

If rental owners were all loose speculators like GR postulated, they would have been falling over themselves to lose tens of thousands per year in extra tax, instead of rental supply declining as owners sold or moved to Airbnb or social. 

And right as momentum fully shifted away from housing supply the government pivoted to insanely high immigration levels. 

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Putting AirBnB to one side, aren't you confusing rental supply with housing supply.  One less rental is one more owner-occupied house.

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Maybe, but my point was what a renter would have to pay. 

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Not when you are importing 130,000 people per year.  The number of immigrants far exceeds the number of FHB leaving a rental property vacant.  Not to mention half the young people still living at home with their parents so they can save for their house deposit.

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You need to can some projects, so the large private sector construction companies provide competitive quotes and price variations appropriately. Otherwise they will simply underquote to get the contract, then milk the public sector once the foot is in the door. Jacking up the price every 6 months or so, knowing those signing the cheques are not spending their own money, and probably have no experience in the commercial world. 

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IMO: 3.9% for the US 10Y puts an end to the HFL fantasy. 3.2% will then destroy the Goldilocks daydream.

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ANZ have cut their testing rate for loans. The smart money knows what's up.

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nah - just trying to get their bonuses.  

i would focus hard on what industry people are employed in more than income...  stability in a recession means that they will pay the interest

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Can they do that? I thought the RB set the parameters.

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The RBNZ sets the parameters at a "whole of bank" level. What each bank does for individual customers is up to the bank.

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Haha... RBNZ: "engineering a recession"... what a bunch of fkin numpties, way past use by date...

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Add in a healthy dollop of fiscal austerity and the near term is looking grim for your average Kiwi.

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Labour clearly was wasting taxpayer money on low-value pursuits that only propped up Wellington bureaucracy and inflation; however, the solution should be targeted spending, not outright austerity.

Willis admitted today morning on RNZ that her government is seeking more "value for money" on infrastructure projects because they have a clear mandate to show fiscal prudence. In other words, this Nat government will find reasons to spend as little as possible on public services and capital projects to make our books look pretty like Key-English did and left the country in a hot mess.
Only difference is this time we're already sitting on a massive infrastructure backlog and NZ won't be as a first-world nation when these guys are done governing it.

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I'm all for short term cuts in government spending. The priority should be to get inflation and interest rates reduced asap so households can get some much needed breathing space.

The previous govt seemed to be in denial that its bloated spending was a major contributor to inflation.

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That much needed breathing space would be affordable houses with much lower levels of debt.  That way there is more disposable income to both save and spend.  How do we prioritise that?

What bloated spending contributed to inflation?  Nothing to do with a supply shock and the people spending like drunken sailors on more property?

 

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inflation is the RBNZ's remit, not the government, and there are key infrastructure projects sorely needed such as public transport, ferry upgrades, things that have along term benefit. Cutting them and letting the current infrastructure degrade further will only result in higher costs, and as Jfoe has already alluded to previously, large scale cuts in govt spending alongside increasing unemployment, high immigration and cuts in private spending is  a recipe for a large recession.

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Yes Labour did waste a lot of money on non productive pursuits, but this was possibly one policy that had the potential to improve productivity that should probably proceed (though not at any price) as opposed to most of Labours failed efforts....it would have been interesting to see how they addressed the cost blow outs should they have been returned.

Instead we appear to have Ruth Richardson reincarnate running fiscal policy.

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We havent been a first world country since Labour took office. We never will be one again, as the country is too poor to keep up with the rest of the world.  At best we can hope to slow the slide into becoming Aotearoa, another third world Pacific Island nation.

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The problem is spending keeps growing even if they cut expenses.

Since labour took power in 2017 another 200k of booomers have hit 65.

That results in another 5 billion plus per year, every year, going on superannuation.

In those 6 years that is $17.5 billion extra on Super.

In a couple of years time there will be a million people 65+.

We'll be spending $25 Billion+ on super per year.

The ferries are chicken feed folks.

The total amount spent on treaty settlements is $3.7 billion, not even 2 months of Superann.

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Logic finally prevails. The rest of us will suffer in order to continue the promise of never-ending universal super while they import over 100k people to keep the tax coming in which pays for it. 

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HFL 10% by Christmas Guaranteed 

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So strange he seems to have disappeared entirely ay?! 😂 

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In terms of per capita GDP, the September quarter saw a 0.9% drop.

Firstly, thank you for releasing a "per capita" figure.

Secondly, a quarterly drop of -0.9% is woeful ! (= -3.6% if annualised at the same rate!)

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You're just trying to be relevant Dr Y. We know you're just here for the property ponzi cheerleading and trolling. 

And good to see you edit your comment. It's important to slow down and read properly. System 2 over System 1.   

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I apologise for my sins, master.  I shall try to learn from you and be more like you, oh great one!

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RBNZ has overcooked it. 

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big time. 

 

If they had training in modelling complex systems in engineering field they'd know the extreme importance of  τ (tau) the time constant for a 63% of a step response. 

 

Reserve banks got that wrong. 

No difference to taking a med,  thinking after 5 mins  "that didnt work ill take another obviously need a bigger dose", you get the idea - repeat another 10 times - then they ALL kick in an hour later and the patient dies from an overdose.

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Don't worry everyone, they'll "revise" the number up in a couple of months and pretend this never happened. 

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That data was still under Labour.  Any revisions will be for future data to say "look how much better we are doing now". 

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100s of thousands of immigrants coming in and we still achieved a recession. Hardly surprising given how centric house trading has become over manufacturing things the rest of the world wants. Immigration is likely to drop off from current lofty levels as the employment situation progressively deteriorates more than likely making the next few GDP releases negative as well. 

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 "per capita GDP, the September quarter saw a 0.9% drop"

Good to see massive population growth is making NZers poorer faster. 

"the Reserve Bank’s interest rate hikes were beginning to overcome the demand from population growth"

Great news. I won't ask why, because I'm an optimist and believe the people running this country are experts, nay geniuses, and I wouldn't want to be "very negative, wet, whiny, inward-looking" Chris. I've decided to view the politically engineered decline in NZs quality of life positively. :-)

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Yeah I love it how NZers are negative and whiny, meanwhile run a campaign based on changes for whiners. We can’t have our transport agency called Waka Kotahi, it must be a boring name like NZTA, and that is the number 1 priority, because old white people whined about it. 

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I was thinking they next need to make private companies have regular names outlining exactly what they do so everyone can understand. Like instead of 'Spark', rename it "Telecommunications Company 2" so everyone knows what it is. We live in a country of people unable to learn or remember new facts, lets keep it simple for them!

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Hahaha this made me laugh. So true! 

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I think it was more a collective F.U to the woke agenda. Stick with NZTA, 99% of us speak English. Enough of the virtue signalling, do what you’re paid to do, fix the roads.

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Using the Maori language isn't woke. Its an official language of the country.

We are truely a country of dullards who cant use more than one language. Many europeans speak multiple languages and we can't even use a couple of Maori words.

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The actual answer is the record migration numbers this time round are not as inflationary due to having a 6:1 ratio of "poor countries" coming in Vs. longer term average of 3:1 for NZ migration. So we pump fill of cheap labour, that labour happy to live 4 people to a bedroom. 

The fact that despite the record migrations figures our GDP is retracting (0.3%) should be a huge shot across the bow of Adrian Orr's paddle boat.

The immigration has worked wonders in CERTAIN (not all) work shortages and stopped rampant pay rises in their tracks but it will be self limiting and will last only as long as the jobs here for them last. 

Once jobs retracts, migration likely 20k-30k more long term numbers, or if they retract big time alongside Aussie doing well (aussy won't as they left hiking too late and will be worse off than NZ so might be see Gen Z plumbers returning home from Aussie) then we could see zero migration - all depends on how we support busineses that make jobs - Govt. wont be paying constrction workers for new infrastucture projects like last time to boost things, the govt is broke!

An early RBNZ cut would send a message of weakness to global markets, and we need them to have faith in our NZD still (or we will be F'd). 

Luckily newly released dot plots from FEDs over in US has some say up to 200bps for them to cut next year as things cool faster than predicted (they said 3.7% core inflation by year end, came in at 3.1% inflation. So they'll go first (of the big fish) letting us slip a couple of 50bps cut in around mid next year. 

 

 

 

 

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Following insane and borderline criminal levels of spending by the previous Labour government - what do we have to show for it? Infrastructure that is buggered, health, education, crime and poverty all worse off - and to put a big fat cherry on the top...a recession. God help us.    

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Any evidence of this spending? Why are National finding it so hard to find their tax cut money if there is so much over spending? 

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They just found a billion with the big boats

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You should give some of the recent Auditor General reports a read before commenting - billion dollar spending programs with about as much oversight as you’d expect to see over the budget of your local lawn bowls club.
 

All that post-Covid money is gone/spent so I’m not sure how you expect National to re-magic up this spent money? Labour also signed 5yr employment contracts for the big-wigs in three waters. Again, not sure National can magic away these contracts they are going to need to pay out,

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"billion dollar spending programs with about as much oversight as you’d expect to see over the budget of your local lawn bowls club"

How much thought has gone into spending $3 billion a year on a $20 tax cut while importing 100k plus migrants a year with an existing infrastructure problem? 

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They are not “spending” anything on a tax cut…they are simply going to reduce the tax “take”, which means they have less opportunity to spend money i.e I get to spend my money and they don’t, which I am all for! They will need to find savings (this is different to spending), which is a part of their job. Thousands less Bureaucrats with their noses in the trough will be a good start. 

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"Thousands less Bureaucrats" - To pay for $3 billion in tax cuts they need to axe 30,000 bureaucrats on $100k. They will struggle to find that many people sitting around with their finger in their bum. They will need to actually reduce some proper spending, lets hope it isn't on infrastructure.

"I get to spend my money and they don’t, which I am all for" - until you go to hospital and its full, and you spend your full tax cut on new wheels due to potholes. 

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Also, currently 30k people are retiring every year adding almost a billion annually to superann expenditure. So the savings from those 30,000 bureaucrats dissapears in 3 years.

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Just 3 Waters saw $1 billion commited to advance contracts lasting 5 years.

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Wait till you see the rates rises.

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Could it be that pumping the property market and tax avoidance industry for the past two decades is the real cause?  For all the "wealth" creation we've achieved we seem all the more poorer for it.

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Perhaps those that have benefited most from the last 2 decades can collectively contribute to the tax take after all those paper gains...oh wait they are dropping the bright line to 2years and reintroducing interest deductability. 

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Defying many economists what you mean to say they got it wrong AGAIN how can that be. If I got as much wrong as they did I would be broke. Maybe rather than they get a nice pay check and bonus for getting it wrong they actually worked on you get it right you get paid. 

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I guess virtue signalling politics doesnt actually increase GDP. 

Aroha. 

The next 5 years should be known as "Jacinda's Long Goodbye".

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I guess virtue signalling politics doesnt actually increase GDP. 

Aroha. 

The next 5 years should be known as "Jacinda's Long Goodbye".

Taking the pis, but unfortunately, your comment is reflective of the reality in the behavior I'm seeing. 

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Its one thing to have an incompetent manager in the office etc, but to have an incompetent head of your country as well as the majority of their party? Beggars belief and justifies the vitriol to most.

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Its amazing how the numbers get adjusted post election.  Who could have seen this coming?  

Now we wait for the other Treasury shoe to fully drop. 

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The past numbers are revised all the time. Have you only noticed this now?

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Obviously, we need more immigration 😜

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I'd call myself pretty optimistic and even I thought the last 3 months have been very quiet, this does not surprise me at all. Sometimes I wonder if these economists live on another planet - they didn't seem to notice how busy everything was pre inflation, and now they haven't noticed how quiet everything is. Maybe the flash restaurants they go to are still busy. 

I'm also picking CPI to come in much much lower than expected, maybe within the 1-3% target if you annualise the quarter. 

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LOL ... revisions aplenty - all down - (I wasn't so wrong after all)

So now we have ...

-0.6 in Dec-22
-0.2 in Mar-23
+0.5 in Jun-23
-0.3 in Sep-23

But we still have Annual GDP at +1.8%.

Anyone want to bet that the Jun-23 quarter will be revised down again?

The domino effect will have started. And the NACTF slash and burn will make it worse. Christmas looking like a damp squib.

This quarter? Minus 0.8? Or worse?

"Watch out below!"

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Sounds like another great time to buy a house, right?

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No.

Why? NPS-UD, MDRS, re-zoning for density, blah, blah, (read my posts on the subject) means the supply parameters have changed for the better for the foreseeable future.

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So it’s a great time to buy a house then yeah?

assuming you can get finance.

we are putting in an offer tomorrow for another investment property and I’ll shave another 5-10% off our already low offer.

people will say don’t catch a falling knife I’m sure but the bank is happy to lend to us and we can handle these interest rates.

same people probably would say don’t fix when interest rates were 2.99% because they were going negative… I fixed for 5 years at 2.99%

 

 

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Hey look another spruiker flexing....waft

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dp

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The beginning of degrowth. Let’s stop immigration and learn to live within our means. No more debt please.

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So I read this as negative growth of -1.2% for the 12 months to Sep 2023 so if we have been in an actual recession for some time. (Dec 2022 -0.6, March 2023 -0.2, June +0.5, Sep 2023 -0.9 = -1.2 for a 12 month period)

If those workings are correct, I'm disappointed with Statistics NZ and Treasury for not providing more accurate information leading up to the election.  Also why haven't economists had there own measures so we know if the economy is growing or not.

Anyway hopefully we can start growing again in 2024

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