Latest / Best of Business / Kim Mundy: ASB Acting Chief Economist on the construction and manufacturing sectors showing signs of recovery in latest survey

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Kim Mundy: ASB Acting Chief Economist on the construction and manufacturing sectors showing signs of recovery in latest survey · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talks B. Follow
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• 0:16
  Speaker 2: The latest A and Z Business Outlook surveys out things
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  Speaker 2: are looking positive. Confidence is continuing to trend upwards, jumping
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  Speaker 2: nineteen points in July to a total of fifty six.
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  Speaker 2: This puts the number above the fifty percent threshold needed
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  Speaker 2: to say that the industry is largely confident. So Kim
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  Speaker 2: Mundy is the asb's acting chief economist and joins me, Now,
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  Speaker 2: so what's driving all of this? Kim?
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  Speaker 3: I do think we've just seen a little bit of
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  Speaker 3: momentum coming through the figures, which is very welcome to
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  Speaker 3: see given that it has been an incredibly volatile environment
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  Speaker 3: and potentially just a little bit of people wanting to
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  Speaker 3: get on with things.
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  Speaker 2: Are we just ignoring oil? I mean, what's driven me
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  Speaker 2: crazy over the last six months as people talking about
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  Speaker 2: the oil price continually when we should just looking at
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  Speaker 2: your basics and it is what it is, isn't.
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  Speaker 3: It to a degree? But I think when that flows
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  Speaker 3: through into prices of petrol and diesel, it is very
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  Speaker 3: much in your face in terms of you are feeling
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  Speaker 3: these effects quite you know, it has a really big
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  Speaker 3: impact on your life, and so I think with that
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  Speaker 3: that the memoryum of understanding had broken down. It did
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  Speaker 3: take a while for that to flow through into retail
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  Speaker 3: petrol prices here in New Zealand, so potentially the August
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  Speaker 3: figures might not be as roach.
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  Speaker 2: Well, I think I think we've actually got with much
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  Speaker 2: better than I ever expected. So this is good, and
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  Speaker 2: we're seeing some positive moves differences from sector de sective.
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  Speaker 2: But what I'm really like, and I've seen this in
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  Speaker 2: a couple of figures, manufacturing and construction are both.
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  Speaker 3: Up exactly, and I think the construction one was really
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  Speaker 3: welcome because obviously the industry has been struggling for a while,
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  Speaker 3: and particularly residential construction lifted and the fact that we're
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  Speaker 3: seeing residential consens rising so much, we had been expecting
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  Speaker 3: some stage that to translate through the activity. So it's
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  Speaker 3: just another sign that we might be getting closer to
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  Speaker 3: a bit of a turnaround in that sector.
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  Speaker 2: Okay, And do you think because there are Yeah, confidence
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  Speaker 2: is going up and there are positive signs, and we're
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  Speaker 2: all looking for a green shoot, particularly if you're in politics,
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  Speaker 2: because that you can sell it at the at the hustings.
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  Speaker 2: But do you think that this just shows that people
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  Speaker 2: just want to get on with stuff.
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  Speaker 3: I think we do need to remember that this was
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  Speaker 3: a snapshot in time. So if you look at when
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  Speaker 3: the responses came in over the months, they did deteriorate
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  Speaker 3: as we got towards the end of July. So that
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  Speaker 3: is just something to keep in mind. Oil prices, as
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  Speaker 3: you know, back up around that ninety dollars a barrel
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  Speaker 3: at the moment, that has flowed through into petrol prices.
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  Speaker 3: But as you said, you know so far activity has
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  Speaker 3: held out better than we were expecting, so there is
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  Speaker 3: that risk that the activity side of things might not
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  Speaker 3: be as bad. But it does mean that there's that
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  Speaker 3: lingering inflation risk, and when there's lingering inflation, there is
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  Speaker 3: a thanks required to act.
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  Speaker 2: Kim. Thank you so much, Kim as asb's acting chief economists.
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