Growth – not spectacular, but comparatively solid – is predicted in the BusinessNZ Planning Forecast for the December 2019 quarter.
The forecast indicates annual GDP growth of 2.5 per cent for the next two years.
“International tensions and financial market volatility are harming global growth, but New Zealand’s fundamentals are still sound,” BusinessNZ chief executive Kirk Hope says.
The NZ agricultural sector is profiting from strong international commodity prices, particularly beef, lamb and dairy, however there is a mixed outlook ahead, with greater regulatory costs and uncertainties around water quality and allocation expected, along with a likely tightening in credit availability following Reserve Bank moves to boost capital requirements on banks.
The manufacturing sector has bounced back after a period of contraction as measured by the BNZ-BusinessNZ PMI (Performance of Manufacturing Index).
Meanwhile, the BNZ-BusinessNZ PSI (Performance of Services Index) shows the services sector remaining firmly in positive territory.
“Improvements in business and consumer confidence provide a positive end to 2019,” Mr Hope said.
The BusinessNZ Economic Conditions Index sits at 10 for the December 2019 quarter, up 9 on the previous quarter.
The Index tracks 33 economic indicators including GDP, export volumes, commodity prices, inflation, debt, and business and consumer confidence.