The economy – down a gear as risks remain
New Zealand’s economic fundamentals are pointing in the right direction but growth is slowing, according to the BusinessNZ Planning Forecast for the June 2015 quarter.
BusinessNZ Chief Executive Phil O’Reilly says the construction, manufacturing and services sectors are showing good growth and inflation is well under control, but international oversupply is forcing down dairy prices and farmer confidence has slumped.
He said business confidence was also down. Business investment and investment intentions – a key indicator for future growth – were still positive but had reduced. Another key indicator, ANZ’s Truckometer, which measures freight vehicle movements, was also pointing to subdued growth.
“Overall, the economy is still showing good growth, especially compared with other developed countries, but a number of risks remain,” Mr O’Reilly said.
The BusinessNZ Planning Forecast incorporates BusinessNZ’s Economic Conditions Index (ECI) which tracks 33 indicators, including GDP, export volumes, commodity prices and inflation, debt and confidence figures.
The ECI sits at 1 for the June 2015 quarter, down 3 on the previous quarter and the same as a year ago.