Latest / Best of Business / Katherine Rich: Business NZ CEO on the services sector contracting for the 18th consecutive month

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Katherine Rich: Business NZ CEO on the services sector contracting for the 18th consecutive month · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talk ZEDB. Follow
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• 0:16
  Speaker 2: A lot of focus on our economy this week. We
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  Speaker 2: got the Q two GDP numbers out Thursday. Alongside those,
• 0:21
  Speaker 2: the latest services sector read down a number one point
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  Speaker 2: four points. We're sitting at forty seven point five in August.
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  Speaker 2: That is eighteen straight months of contraction. Catherine Rich's the
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  Speaker 2: Business New Zealand CEE Owners with Us. Catherine, Morning to you,
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  Speaker 2: Good morning. We saw a little bit of life in
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  Speaker 2: retail up zero point nine percent, driven by apparel and hospitality.
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  Speaker 2: How would you describe it? Patchy, worried, problematic? What do
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  Speaker 2: we got?
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  Speaker 3: It is patchy. I think we're what we're facing as
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  Speaker 3: a tailor of two economies. Really, we know the primary
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  Speaker 3: sector is doing quite well, but of course major part
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  Speaker 3: of the economy is a services sector and we're still
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  Speaker 3: seeing that part of the economy really facing challenges and
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  Speaker 3: that's what our PSI result shows eighteen months of contraction.
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  Speaker 3: But on the other side, we're seeing from the Business
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  Speaker 3: New Zealand Sentiment Survey a bit of an uptick in
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  Speaker 3: the way firms are considering investment particularly for next year.
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  Speaker 3: So that's positive.
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  Speaker 2: So we had those numbers just before seven o'clock. So
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  Speaker 2: the intent is driven by what Is it driven by
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  Speaker 2: hope or is it driven by some tills actually rung
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  Speaker 2: and I've got some money to spend.
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  Speaker 3: I think it's a combination of hope. But for those
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  Speaker 3: people who follow the news closely, they do see that
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  Speaker 3: the government's trying to pull every single economic growth lever
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  Speaker 3: it possibly can with changes to immigration and tax and
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  Speaker 3: the RMA, and I could list out the rest of them.
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  Speaker 3: People know what they are. But I think also some
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  Speaker 3: understand it's an incredibly long lead time and so while
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  Speaker 3: some of those changes aren't immediately obvious for twenty twenty six,
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  Speaker 3: a lot of those changes will come to fruition.
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  Speaker 2: Yeah, what do you how much weight do you place
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  Speaker 2: on consumer confidence in the sense that how many people
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  Speaker 2: do you think are in a funk because they've decided
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  Speaker 2: to be in a funk as opposed to they could
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  Speaker 2: probably have a different attitude if they wanted.
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  Speaker 3: I think there is an element of being a small
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  Speaker 3: country where we can talk ourselves into a bit of
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  Speaker 3: a funk. But that's why I think the Business New
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  Speaker 3: Zealand data about both our Performance of Manufacturing Index and
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  Speaker 3: our Performance of Services Index are good leading indicators because
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  Speaker 3: they show economists what businesses are thinking today and the future.
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  Speaker 3: The issue with the primary sector is that, yes, it's
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  Speaker 3: doing well, but there's not a lot of indication that
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  Speaker 3: it's flowing through to spending. And I think some consumers,
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  Speaker 3: even with changes to the OCR and other more upbeat indicators,
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  Speaker 3: they're still saying, look, I'm not one hundred percent sure
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  Speaker 3: I trust that, yet I'm still going to keep my
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  Speaker 3: hand in my pockets.
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  Speaker 2: Yeah, all right, Okay, I appreciate it. Catherine Catherine Rich,
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  Speaker 2: who's the Business New Zealand CEO, be worried about what
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  Speaker 2: Andrew Keller has said earlier on in the program that
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  Speaker 2: we talked ourselves into the potential of something happening this
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  Speaker 2: year economically and it hasn't and whether or not it
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  Speaker 2: may not actually come to pass. But as I say,
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  Speaker 2: the GDP numbers out on Thursday.
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