The Weekly Overview is written by Tony Alexander. The views expressed are my own and do not purport to represent the views of the BNZ. Nothing Much Learnt This Week.
Tony Alexanders Comments - Things have settled down
This week we have not learnt anything new of substance with regard to the state of or prospects for the NZ economy. We remain optimistic about growth next year on the basis of rebuilding Christchurch, farmers spending more of their high incomes, an acceptable world growth environment, a rapidly tightening NZ labour market with some fairly severe structural staff shortages appearing, catch-up house building in Auckland, underlying long term growth in some sectors such as filming and IT, and eventually catch-up spending by householders and businesses as confidence about the sustainability of the growth improves. Read more »
Is Our Economy Getting Better or Worse?
We have not received any fresh information on the state of the NZ economy this week.
Are householders opening their wallets more? Nothing new.
Is business output rising? Nothing new.
Weekly Newspaper Column http://tonyalexander.co.nz/newspaper-column/
Are businesses hiring more people? To view our latest monthly NZ Labour Market report click here. http://tonyalexander.co.nz/nz-labour-market/ Empty.
Are businesses boosting their capital spending? To see how businesses are feeling right now one can read our monthly BNZ Confidence Survey here.
http://tonyalexander.co.nz/bnz-confidence-survey/
Ditto. Read more »
Interest Rates: Growth vs. Economic Slack
Well that was that. For a brief period the combination of higher than expected inflation and firmish data led to a shifting in monetary policy tightening expectations to September from December, 30 point jumps in wholesale fixed borrowing costs, and the arrival therefore of a time for borrowers planning to fix this cycle to do so. But now things have more than completely reversed with world market turbulence quite clearly set to worsen global growth prospects and our willingness to spend, invest and hire in the short term. That means monetary policy tightening has been pushed back out again. Read more »
If I Were a Borrower What Would I Do?
If my plan were to float all the way through this cycle then I might keep an eye out for any attractive 12 or 18 month fixed rate at levels close to current floating rates as we expect floating rates to be rising from December. If my plan were to fix I feel that once again time is on my side so I would sit floating but anticipate fixing before the end of the year. Clearly picking when to pick this move is proving problematic so don’t feel like you have made a mistake if over the past month you have moved from floating to fixed. You have rate certainty which many others will be seeking in coming months and which many will eventually regret not securing once the monetary policy cycle is truly chugging along. Read more »
