BNZ Weekly Overview March 17

Welcome to the March 17 issue of the BNZ Weekly Overview.

Fresh NZ data have been rare this past week and all attention has naturally been on the earthquake-induced disaster in Japan. The still unfolding events imply a worsened global growth environment this year with increased uncertainty and that explains falls in sharemarkets, some commodity prices, long term interest rates, and the Kiwi dollar. Prospects for the NZ tourism sector were looking poor before the earthquake and tsunami and now the outlook is even worse. Yet for some sectors there is reason to expect gains once the large rebuilding task starts up – almost certainly well before the reconstruction happens in Christchurch.

With regard to this week’s data we have learnt that dwelling sales showed some interesting strength in February with rising prices, and we retain our view that the worsening fundamental housing shortage will from late this year produce rising sales, construction, and prices for a whole variety of reasons we outline in our Housing section.

Last week we reported our monthly survey showing a sizeable fall in business confidence following the Christchurch earthquake. That implies short term weakness in hiring and capital spending. Now the ANZ-Roy Morgan survey has shown consumer confidence down also and we see little reason for expecting anything other than that NZ householders will continue to strongly favour saving over spending for the remainder of this year bringing therefore continued weak retailing conditions.

A good number of people last week asked to be sent a copy of our report looking at factors which drive net migration flows to Australia and why we think the flow will soar. So to simplify things we have made the paper available for download at our new on-line filing cabinet
http://tonyalexander.co.nz/?page_id=43

At that site you will also find a copy of the weekly newspaper column produced since 1998 (only this year’s columns provided) http://tonyalexander.co.nz/?page_id=79

Plus, at http://tonyalexander.co.nz/?page_id=112 you’ll find a paper we shall update each week outlining our interpretation of the current situation for major macroeconomic variables and industries and where we expect these things to go. The paper will be quite handy for those businesses who need to file reports each month to offshore parties outlining what’s going on in our far-flung economy. Placing the material there also means we can work on reducing the size of the Weekly Overview which has become rather large since the start of this tumultuous year.

The site also contains the first paper in our series looking at the factors identified as impeding growth in New Zealand productivity and therefore incomes. http://tonyalexander.co.nz/?page_id=6

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