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May 31 edition of the BNZ Weekly Overview

Welcome to the May 31 edition of the BNZ Weekly Overview.

This week we have seen both negative and positive numbers appear on the New Zealand economy with good strength in construction data but a sharp decline in business confidence and activity expectations along with weaker investment and employment intentions. But the survey didn't capture the strong news from Fonterra. The addition the higher payout will make to economic growth next year along with the easing of fiscal policy contained within the budget means we still expect reasonable growth in the New Zealand economy going forward. That means the chances are very strong that the Reserve Bank will increase their official cash rate next week and if they don't do it then an increase will probably come not too far down the track.

See... http://img.scoop.co.nz/media/pdfs/0706/WOMay31.pdf

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