Latest / Best of Business / John Pask: BusinessNZ Chief Economist on their latest forecast predicting solid economic growth out to 2028

Transcript

John Pask: BusinessNZ Chief Economist on their latest forecast predicting solid economic growth out to 2028 · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from Newstalk ZB. Follow this
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• 0:16
  Speaker 2: Another new forecast, though, right now for New Zealand Inc.
• 0:20
  Speaker 2: It cements the idea that recovery is well and truly on.
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  Speaker 2: We've had Moody's, Westpac, Infometrics all suggesting growth is here
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  Speaker 2: and accelerating. Business New Zealand this morning, they had a
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  Speaker 2: broad-based report. It tells us manufacturing is in expansion, tourism arrivals,
• 0:32
  Speaker 2: they're up. Construction is forecast to hit $ 65 billion by 2030.
• 0:36
  Speaker 2: Unemployment's peaked. That's good. GDP could be 3% by 2028. Now,
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  Speaker 2: John Pask is the New Zealand business, New Zealand chief economist,
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  Speaker 2: and is with us. John, very good morning to you.
• 0:47
  Speaker 3: Good morning.
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  Speaker 2: I do note a variation between Westpac Infometrics and you
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  Speaker 2: on this GDP number going forward. Are we still in
• 0:53
  Speaker 2: the area of the unknown? Are you pretty bullish on
• 0:56
  Speaker 2: your number?
• 0:59
  Speaker 3: These are actually bank forecasts, so businesses, my name myself,
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  Speaker 3: has done the commentary around those, but the actual numbers
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  Speaker 3: forecasts themselves are bank forecasts. So there's certainly still a
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  Speaker 3: lot of uncertainty in the world, particularly in terms of
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  Speaker 3: geopolitical risks, but broadly speaking, sector performance is actually improving
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  Speaker 3: quite strongly.
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  Speaker 2: What's your read on 3% by 28? Does that max
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  Speaker 2: out our productivity? In other words, the wheels start to
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  Speaker 2: wobble at about 3% plus?
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  Speaker 3: No, I think productivity is still a big issue, but.
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  Speaker 3: You know, looking at it, there's still strong demand in
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  Speaker 3: terms of the agricultural sector, you know, for dairy, beef.
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  Speaker 3: But there are some risks there in terms of the
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  Speaker 3: inflation side. Input costs are still pretty high. And, I mean,
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  Speaker 3: we're still holding out for what happens in the Middle East. So,
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  Speaker 3: you know, there are potential risks there. But by and large,
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  Speaker 3: businesses are just getting on and doing business. And, you know,
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  Speaker 3: we were slightly surprised with this, you know, in the
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  Speaker 3: upcoming election. and potential risks surrounding policy changes. But businesses
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  Speaker 3: are basically saying, look, we are concerned, but we're moving forward.
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  Speaker 2: Yeah, I get that vibe too, and that's what a
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  Speaker 2: war will do for you. An election is nothing compared
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  Speaker 2: to a war. If you can go through a war
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  Speaker 2: and the whole world's upended and who the hell knows
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  Speaker 2: what's going to happen tomorrow, you've just at some point
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  Speaker 2: got to get on with it, don't you? And therefore,
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  Speaker 2: election's just another day at the office.
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  Speaker 3: Yeah, I think, though, that they are important. I mean,
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  Speaker 3: we've done a lot of You know, it's really, really important.
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  Speaker 3: We're pretty much a market-based economy in New Zealand, so
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  Speaker 3: it's important that, you know, people have incentives to invest.
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  Speaker 3: We've got a strong regulatory framework and those sort of things.
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  Speaker 3: So they are important, but they're not the be-all and end-all,
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  Speaker 3: as it were.
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  Speaker 2: Interesting that the jobs, I'm not seeing enough advertising, you know,
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  Speaker 2: in other words, the people who want to enter the
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  Speaker 2: market for a job aren't being soaked up by the
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  Speaker 2: increase in job ads. You think that that turns at
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  Speaker 2: some point, and is it a slow grind?
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  Speaker 3: Yeah, I think it still is an issue for, you know,
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  Speaker 3: we've got underutilisation, which basically means people want to work
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  Speaker 3: longer and it also includes the unemployed as well. But,
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  Speaker 3: you know, the level of youth unemployment has always been
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  Speaker 3: a problem. But, you know, that is still reasonably high. But,
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  Speaker 3: you know, most forecasts are sort of saying, look, I
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  Speaker 3: think we're pretty close to the peak and things are
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  Speaker 3: improving from here on in. Yeah, exactly.
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  Speaker 2: Do you ever read on Q2, by the way? We
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  Speaker 2: were talking to Andrew Keller a couple of moments ago.
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  Speaker 2: I wouldn't be surprised if it's to the upside. I mean,
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  Speaker 2: everyone thought it was going to be backwards, you know,
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  Speaker 2: because of the war. I wouldn't be surprised if it's
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  Speaker 2: at least zero, if not, you know, slightly positive.
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  Speaker 3: Yeah, I think most of our indicators, looking at our
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  Speaker 3: business conditions index, it was basically pretty close to zero.
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  Speaker 3: So I think there might be marginal growth. Yeah, you're
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  Speaker 3: absolutely right. It looked like it was going to be
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  Speaker 3: a lot more negative overall. But I doubt if there's
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  Speaker 3: much growth in there at all. I mean, you know,
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  Speaker 3: a lot of indicators sort of fell off the cliff
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  Speaker 3: a wee bit at the early stages. So, yeah.
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  Speaker 2: Well, let's see next week and see what they say.
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  Speaker 2: Appreciate it, John. John Pask, who is the Business New
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  Speaker 2: Zealand Chief Economist. By the way, Canterbury, there's a funny headline.
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  Speaker 2: Canterbury businesses see light at the end of the tunnel. Now,
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  Speaker 2: that's just negativity, isn't it? Because when you look at
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  Speaker 2: the number, From Business Canterbury yesterday, 72% expected the Canterbury
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  Speaker 2: economy to be stronger.
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  Speaker 1: 72%.
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  Speaker 2: In other words, the vast majority. There's no light at
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  Speaker 2: the end of the tunnel because there's no tunnel. Canterbury's
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  Speaker 2: been booming for God's sake. Centimetres 20 points higher. Investment
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  Speaker 2: intentions remain high. 71% plan to invest in property, plant
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  Speaker 2: and equipment. 12 points higher. 68% expected to hire extra staff.
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  Speaker 2: Increasingly focused on long-term opportunity. If I'd written that headline,
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  Speaker 2: I would have said Canterbury's booming. Still, see the difference?
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  Speaker 2: It's all about attitude.
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