Latest / Best of Business / Sharon Zollner: ANZ Chief Economist on construction leading the return of optimism to the business sector

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Sharon Zollner: ANZ Chief Economist on construction leading the return of optimism to the business sector · Best of Business

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  Speaker 1: Ever do for Sea Ellen.
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  Speaker 2: Well business optimism? How good is this? Keeps growing? It's
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  Speaker 2: up five points in October alone to sixty six points.
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  Speaker 2: Businesses are still rating their own activity much lower though,
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  Speaker 2: at negative eleven, but that's still at the highest level
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  Speaker 2: since March. Sharon Zola is A and z's chief economist
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  Speaker 2: and with us.
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  Speaker 3: Hey, Sharon, good evening.
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  Speaker 1: What do you put this.
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  Speaker 2: Optimism down to? Is this basically the rate cuts?
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  Speaker 3: I'd say so, I mean, when it boils down to it,
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  Speaker 3: the slow down scene caused by higher interest rates. So
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  Speaker 3: why wouldn't lower interest rates be the solution. There hasn't
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  Speaker 3: been a lot else going on. There's obviously some fiscal
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  Speaker 3: cutting that's hurting Wellington, and the export markets in China
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  Speaker 3: maybe aren't so great at the moment. But but overall
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  Speaker 3: the slowdown has really been a result of interest rates.
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  Speaker 3: So in that context, it's perhaps not surprising to see
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  Speaker 3: a fairly enthusiastic response to rates now coming down.
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  Speaker 2: What are you seeing in the construction sector.
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  Speaker 3: It's a really interesting one because the construction sector is
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  Speaker 3: by far the most sensitive to interest rates, and it's
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  Speaker 3: just generally on a bigger rollercoaster than the rest of
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  Speaker 3: the economy. It was booming the most in twenty twenty one,
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  Speaker 3: but it's actually been the weakest since early twenty twenty
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  Speaker 3: three in terms of what they are reporting for experienced
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  Speaker 3: activity as opposed to their expectations. But they've also had
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  Speaker 3: the biggest lift in that. So this isn't just the
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  Speaker 3: hope and optimism looking forward that fewer construction zerms are
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  Speaker 3: now reporting that they're less busy than a year ago.
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  Speaker 3: They're still the majority, so you know, it's still pretty
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  Speaker 3: tough times, absolutely, but things are just perhaps starting to
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  Speaker 3: look up a little.
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  Speaker 2: What are you expecting in the unemployment numbers next week?
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  Speaker 3: We're picking four point nine. There is a banks at five.
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  Speaker 3: I've seen an estimate of five point one out there,
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  Speaker 3: so we're all there or thereabouts. The number can surprise
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  Speaker 3: us because it's impacted not only by how many people
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  Speaker 3: are employed, but also by how many people are looking
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  Speaker 3: for work, and that can actionally jump around quite a bit,
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  Speaker 3: so the details will matter, but we're all forecasting at number.
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  Speaker 2: Around five, right, four point nine from you guys, on
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  Speaker 2: the path to.
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  Speaker 3: What we're picking around five and a half. That seems
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  Speaker 3: to be the general expectation. There are some people picking
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  Speaker 3: that could go as high as six. Hopefully not, but
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  Speaker 3: you know, in the early nineteen nineties it went well
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  Speaker 3: into double digits. But there in our survey too, there
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  Speaker 3: was some good news. Employment intentions lifting strongly, and actually
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  Speaker 3: ferns reported past employment also lifting again, still negative, but
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  Speaker 3: it does suggest that perhaps themagin some ferns are choosing
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  Speaker 3: to keep their staff in anticipation of better time for
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  Speaker 3: love it.
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  Speaker 2: Yeah, that's great, hey, Sharon, thank you very much, appreciate it.
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  Speaker 2: Sharon's on ains's chief economist.
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