Latest / Early Edition with Ryan Bridge / Brad Olsen: Infometrics Chief Economist on the GDP increase and what it means for quarter 2

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Brad Olsen: Infometrics Chief Economist on the GDP increase and what it means for quarter 2 · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Headline was zero point two percent to the good and
• 0:02
  Speaker 1: we're officially out of recession, but it an't over, of course,
• 0:04
  Speaker 1: and that's the real story. With the current court, are
• 0:07
  Speaker 1: widely expected to be back down again. So where does
• 0:09
  Speaker 1: all this lebar Beleaguet Economy Info Metric CEO Brad Olsenbacher.
• 0:12
  Speaker 1: This Brad, very good morning to you. Good morning, and
• 0:15
  Speaker 1: I think congratulations and order. I think last time we talked,
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  Speaker 1: you saw growth growth, it was what do you see
• 0:19
  Speaker 1: for Q two?
• 0:21
  Speaker 2: Well, you're right, I mean, numbers at the moment don't
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  Speaker 2: look all that good for Q two. And I think also,
• 0:26
  Speaker 2: I mean, yes, it was growth, but it was sort
• 0:28
  Speaker 2: of hiding the hurt that everyone's feeling out there. Per
• 0:31
  Speaker 2: capita growth was still down twenty three percent. That was
• 0:35
  Speaker 2: six consecutive quarters, one and a half years of activity,
• 0:39
  Speaker 2: where per person that's going down, so people are getting
• 0:42
  Speaker 2: smaller slice of the economic pie. I fuel then looking
• 0:45
  Speaker 2: at some of those industry results as well, I guess
• 0:48
  Speaker 2: the worry that we had it's looking for that Q
• 0:50
  Speaker 2: one data was that it was some of the important
• 0:53
  Speaker 2: pieces of the business economy that haven't been doing as well.
• 0:57
  Speaker 2: Construction is down, non food men, mafacturing is down, professional
• 1:01
  Speaker 2: services and similar are all down. That doesn't bode well
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  Speaker 2: for general weeking like momentum, and you look at some
• 1:07
  Speaker 2: of the spending figures and similar coming out and it
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  Speaker 2: does seem like again, really the kindly is not going
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  Speaker 2: anywhere fast. I think the biggest thing is looking at
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  Speaker 2: both the first figure that we got yesterday thinking about
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  Speaker 2: the second quarter of the year that we're in. At
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  Speaker 2: the moment, the Reserve Bank, it probably doesn't change their
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  Speaker 2: view too much in either direction. It's not enough to
• 1:27
  Speaker 2: make them think they can cut earlier, but it shouldn't
• 1:30
  Speaker 2: be enough to make them push out any expectations any further.
• 1:34
  Speaker 1: Well, what they're saying is next year for a cut.
• 1:36
  Speaker 1: So if they're on track and they'll run there, this
• 1:39
  Speaker 1: is going to plan line. So all the people who
• 1:42
  Speaker 1: think somehow we're getting there this year, they're wrong.
• 1:46
  Speaker 2: Well, at the moment, I'd find it very hard to
• 1:49
  Speaker 2: believe that there'd be enough evidence for the Reserve Bank
• 1:51
  Speaker 2: to go they think they can cutch this year. I
• 1:54
  Speaker 2: mean in a sense I think you can make a
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  Speaker 2: convincing argument, you and me, and then lots of other
• 1:58
  Speaker 2: people will probably say that there would be enough station.
• 2:01
  Speaker 2: But the bank that they are worried. They've sort of said, look,
• 2:03
  Speaker 2: we haven't met our target. We're still worried about the
• 2:06
  Speaker 2: persistence of inflation. We're worried about how sticky some of
• 2:10
  Speaker 2: that core, particularly domestically based pressures are, And I think
• 2:13
  Speaker 2: that's the sort of thing where we looked at some
• 2:15
  Speaker 2: of the numbers yesterday and satsan Z said, look, we're
• 2:18
  Speaker 2: not one hundred percent sure we're splitting up the like
• 2:21
  Speaker 2: tourism spending versus you know, residents spending all that well,
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  Speaker 2: but overall spending in the economy, and this one is
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  Speaker 2: actually easy to measure. Spending in the economy was uper
• 2:30
  Speaker 2: point eight percent in the first three months of the year.
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  Speaker 2: That says that there is some parts of society, not everyone,
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  Speaker 2: but some parts that are going all right. They're probably
• 2:39
  Speaker 2: not talking about it all that much, all of the
• 2:41
  Speaker 2: hurt and pain. But if that's the case in the
• 2:43
  Speaker 2: Reserve Bank, that they are worried that they will not
• 2:45
  Speaker 2: hit their target, and they will be wanting to wait
• 2:48
  Speaker 2: and worry quite a while longer.
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  Speaker 1: But that's their conundrum, isn't it. Because there are if
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  Speaker 1: you don't have debt, bread and you've seen the travel
• 2:54
  Speaker 1: things and stuff, and you're after Europe for summer in July,
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  Speaker 1: then that those are the people are doing well and
• 2:58
  Speaker 1: there's no shortage of those are they not well?
• 3:02
  Speaker 2: And the thing is you've got about a third of
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  Speaker 2: the population that renters that are being hit with you know,
• 3:07
  Speaker 2: high cost generally and also some of the fastest rental increases.
• 3:10
  Speaker 2: Are you going back to the nineties. You've got mortgage
• 3:13
  Speaker 2: holders of course, are being hit very very hard and
• 3:16
  Speaker 2: facing all the other general inflation, the last dirt the economy.
• 3:19
  Speaker 2: Don't got their houses freehot, they're not paying any more
• 3:22
  Speaker 2: good rates. The only thing that's really dictating what happens
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  Speaker 2: to them is if they're putting their money into a
• 3:26
  Speaker 2: term deposit and so they've got that sort of money,
• 3:29
  Speaker 2: then yeah, maybe sure they're doing a bit of that,
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  Speaker 2: but like you say, they're also spending. And that sort
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  Speaker 2: of area where there seems to be enough businesses that
• 3:36
  Speaker 2: are still able to put up prices. I mean, I
• 3:38
  Speaker 2: saw one again the other day, one of the talent
• 3:40
  Speaker 2: communications companies putting up their prices again at a time
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  Speaker 2: when we're all being told to pull back. So it's
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  Speaker 2: still happening out there, and it's happening enough that it's
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  Speaker 2: causing that worry.
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  Speaker 1: You're a good man, you have a good weekend. We'll
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  Speaker 1: catch up, so appreciate it very much. Brad Olson, who
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  Speaker 1: is the Informetric's chief executive with us this morning, of course.
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