Plan for a moribund economy, says BusinessNZ

Tuesday 18th September 2012

More evidence is emerging that the New Zealand economy remains stuck in a subdued, low-growth pattern, with BusinessNZ's September Planning Forecast report showing the economy is "more or less stagnant."

While food and other soft commodities are not taking the hammering being experienced by minerals, the high New Zealand dollar and the fall-off in growth in Asia, particularly China, means businesses should plan for more of the same uncertain conditions, the business lobby's economist John Pask says.

Based on numerous current economic indicators, the latest analysis shows no strong evidence of growth or decline.

"The global economic growth outlook is subdued, with reduced demand likely to impact on New Zealand, although drought in the US may increase grain and beef prices to the advantage of New Zealand meat producers," said Pask in a commentary note. "Although recent dairy trade auction results have been buoyant, future projections for dairy are muted."

While there were signs of life in the Auckland housing market and the Christchurch rebuild is starting to gain steam, these were no more than pockets of optimism which were not showing up in either employment or output improvements.

"For now, uncertainty is the new certainty," said Pask.

BusinessDesk.co.nz

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