Kia ora koutou,
Overall the New Zealand economy is growing at a reasonable pace, better than most of our peer countries, but still slower than in recent years. Generally speaking, it’s been slowly losing steam since mid-2017. A recession is possible, but not likely. It would need some kind of a shock; a severe drought or worsening global economic and financial conditions.
As it’s an election year, the New Zealand economy will be rudderless in 2020 with not much action. The Reserve Bank of New Zealand (RBNZ) has cut interest rates, albeit very low interest rates, so these changes are having little impact. The main tool to manage the economy is now fiscal policy, but there is unlikely to be a big boost until 2021, after the election in late 2020. But when that happens, the scope is positive. By global comparisons, New Zealand has a very strong fiscal position and a long list of projects that will make the economy go faster.
For our region, the cyclical pressures are inescapable. We have seen the usual signs of slowing in indicators like slowing in house sales, tick up in job seeker benefits and reduction in job ads.
But economic cycles are entirely normal – they come and go.
The underlying fundamentals are solid. Our key strengths in food, public sector and logistics have scope to provide continued prosperity. We can realise more of our potential, if we work together to:
- Massively boost our food innovation sector
- Increase the region’s connectivity through road, rail and air to supercharge the logistics sector
- Nurture public sector services and jobs
- Attract talent to the region
For local councils, their big contribution should be to make sure homes remain affordable (through zoning capacity, demolishing land banking, and long-term targeted debt funding for infrastructure) and quality of life high.
CEDA Board Member