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Nick Tuffley: ASB Chief Economist on a brighter outlook for the economy in 2026 · The SME Stream

• 0:00
  Speaker 1: So now there is increasing confidence the next year really
• 0:02
  Speaker 1: will be better economically. I know we've been saying this
• 0:04
  Speaker 1: for ages, but it's going to be next year. Asb's
• 0:07
  Speaker 1: latest quarterly economic forecast is out there, calling clear signs
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  Speaker 1: of recovery in twenty six consumers spending up big ticket purchases,
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  Speaker 1: returning interest rates easing off. Nick Tuffley is asb's chief
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  Speaker 1: economist and.
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  Speaker 2: With us Morning, Nick, Good morning.
• 0:20
  Speaker 1: OK, give it to me. Out of one hundred hour
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  Speaker 1: confident are you in this, let's.
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  Speaker 2: Say about about about an eighty. Look, you never say never,
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  Speaker 2: but the seeds of their recovery look like they are
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  Speaker 2: starting to really come through, and we know there are
• 0:35
  Speaker 2: a few things that will give a bit more momentum
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  Speaker 2: next year as well.
• 0:37
  Speaker 1: So what are you picking two and a half next year?
• 0:40
  Speaker 2: You know we've got gross picking up and heading over
• 0:43
  Speaker 2: two and a half percent for a period. And let's
• 0:45
  Speaker 2: face it that after the last three years of the
• 0:47
  Speaker 2: economy literally going nowhere, we've got a lot of spare capacity.
• 0:51
  Speaker 2: We do need the economy to actually grow faster than
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  Speaker 2: what we call it it's sort of usual speed limit
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  Speaker 2: of somewhere around about two percent.
• 1:00
  Speaker 1: Do you I mean, saying it's going to be two
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  Speaker 1: percent two and a half percent is one thing, But
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  Speaker 1: are we actually going to feel it or is it
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  Speaker 1: going to be you know, because at the moment we're
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  Speaker 1: not feeling it in the cities while they're feeling it
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  Speaker 1: in the regions. Are we all going to feel it?
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  Speaker 2: I think we'll feel it a lot more evenly. Look
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  Speaker 2: at it still has been quite patchy even in retail
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  Speaker 2: spending where we've seen some really strong growth. It's been
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  Speaker 2: in some of the big ticket, big ticket items. But
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  Speaker 2: we are starting to see a turnaround in the construction sector,
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  Speaker 2: particularly the residential It is turned the corner after falling
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  Speaker 2: quite a bit. And look, there is a lot more
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  Speaker 2: cash that we will see more visibly coming through. So
• 1:34
  Speaker 2: we still have you know, a bit under half of
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  Speaker 2: people on a mortgage and effect waiting to benefit from
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  Speaker 2: the really low rates. And there is a lot of
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  Speaker 2: cash that people have been earning in the dairy, red meat,
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  Speaker 2: kiwi fruit sectors. There's some examples and we'll see more
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  Speaker 2: of that flow through to the regions around the country. Ok.
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  Speaker 1: At that half who are yet to refix on the
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  Speaker 1: lower rates, when do they like when is this happening
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  Speaker 1: for them.
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  Speaker 2: Yeah, it has started to really sort of build up now,
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  Speaker 2: and we'd expect that by the middle parts of next
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  Speaker 2: year a lot of a lot of the benefit will
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  Speaker 2: have started to flow through. It's just because so many
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  Speaker 2: people are picking a floating rate or a six month
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  Speaker 2: rate or even a one year rate over the last
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  Speaker 2: year or so, that's kind of slowed down, ironically, the
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  Speaker 2: benefit for the economy, but obviously it's given people a
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  Speaker 2: window to fix it a much lower rate.
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  Speaker 1: Yeah, HSBC, I had a chat to them on Friday.
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  Speaker 1: They're picking us round actually the same as you two
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  Speaker 1: and a half beating Australia at two point one. Would
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  Speaker 1: you say that's about right. We're going to out before Australia.
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  Speaker 2: We've got a good chance. And hey, look we've got
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  Speaker 2: some figures where we're hitting like about two point seven
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  Speaker 2: percent on an annual average, just to sort of like
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  Speaker 2: emphasise or a little bit ahead of Australia. But look,
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  Speaker 2: we're in a bit of an upswing after a pretty
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  Speaker 2: tough time Australia has they sort of chugged along. But
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  Speaker 2: the biggest problem at the moment, and I've got interest
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  Speaker 2: rates at probably a restrictive level. Is the biggest problem
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  Speaker 2: is that inflation has been creeping up again, and their
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  Speaker 2: economy did sail on through things a lot better than ours.
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  Speaker 2: We have to we have to sort of really acknowledge
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  Speaker 2: that to.
• 3:00
  Speaker 1: All Right, Hey, listen, Nick, it's good to talk to you.
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  Speaker 1: Thank you so much. Enjoy the rest of your morning,
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  Speaker 1: Nick Tagley, ASP's chief economist.
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• 3:08
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• 3:11
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