Latest / Early Edition with Ryan Bridge / 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 · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: The latest A and Z Business Outlook surveys out things
• 0:04
  Speaker 1: are looking positive. Confidence is continuing to trend upwards, jumping
• 0:08
  Speaker 1: nineteen points in July to a total of fifty six.
• 0:10
  Speaker 1: This puts the number above the fifty percent threshold needed
• 0:13
  Speaker 1: to say that the industry is largely confident. So Kim
• 0:18
  Speaker 1: Mundy is the asb's acting chief economist and joins me. Now,
• 0:22
  Speaker 1: so what's driving all of this? Kim?
• 0:26
  Speaker 2: I do think we've just seen a little bit of
• 0:28
  Speaker 2: momentum coming through the figures, which is very welcome to
• 0:32
  Speaker 2: see given that it has been an incredibly volatile environment
• 0:37
  Speaker 2: and potentially just a little bit of people wanting to
• 0:40
  Speaker 2: get on with things.
• 0:42
  Speaker 1: Are we just ignoring oil? I mean what's driven me
• 0:46
  Speaker 1: crazy over the last six months as people talking about
• 0:49
  Speaker 1: the oil price continually when we should just be looking
• 0:52
  Speaker 1: at your basics and it is what it is, isn't it.
• 0:56
  Speaker 2: To a degree? But I think when that flows through
• 0:58
  Speaker 2: into prices of peace and diesel, it is very much
• 1:02
  Speaker 2: in your face in terms of you are feeling these
• 1:04
  Speaker 2: effects quite you know, it has a really big impact
• 1:09
  Speaker 2: on your life. And so I think the fact that
• 1:12
  Speaker 2: the memory of understanding had broken down, it did take
• 1:15
  Speaker 2: a while for that to slow through into retail petrol
• 1:18
  Speaker 2: prices here in New Zealand, so potentially the August figures
• 1:21
  Speaker 2: might not be as roch.
• 1:22
  Speaker 1: We I think. I think we've actually coped with much
• 1:25
  Speaker 1: better than I ever expected. So this is good, and
• 1:27
  Speaker 1: we're seeing some positive moves differences from sector to sective.
• 1:31
  Speaker 1: But what I'm really like, and I've seen this in
• 1:32
  Speaker 1: a couple of figures, manufacturing and construction are both up.
• 1:37
  Speaker 2: Exactly, and I think the construction one was really welcome
• 1:40
  Speaker 2: because obviously the industry has been struggling for a while,
• 1:43
  Speaker 2: and particularly residential construction lifted and the fact that we're
• 1:48
  Speaker 2: seeing residential consens rising so much, we had been expecting
• 1:51
  Speaker 2: at some stage that to translate through to activity. So
• 1:54
  Speaker 2: it's just another sign that we might be getting closer
• 1:56
  Speaker 2: to a bit of a turnaround in that sector.
• 1:58
  Speaker 1: Okay, And do you think because there are confidence is
• 2:04
  Speaker 1: going up and there are positive signs, and we're all
• 2:06
  Speaker 1: looking for a green shoot, particularly if you're in politics,
• 2:08
  Speaker 1: because that you can sell it at the at the hustings,
• 2:11
  Speaker 1: But do you think that this just shows that people
• 2:13
  Speaker 1: just want to get on with stuff.
• 2:16
  Speaker 2: I think we do need to remember that this was
• 2:18
  Speaker 2: a snapshot in time. So if you look at when
• 2:20
  Speaker 2: the responses came in over the months, they did deteriorate
• 2:23
  Speaker 2: as we got towards the end of July. So that
• 2:25
  Speaker 2: is just something to keep in mind. Oil prices, as
• 2:28
  Speaker 2: you know, back up around that ninety dollars a barrel
• 2:31
  Speaker 2: at the moment, that has flowed through into petrol prices.
• 2:35
  Speaker 2: But as you said, you know, so far activity has
• 2:38
  Speaker 2: held that better than we were expecting. So there is
• 2:40
  Speaker 2: that risk that the activity side of things might not
• 2:43
  Speaker 2: be as bad. But it does mean that there's that
• 2:46
  Speaker 2: lingering inflation risk, and when there's lingering inflation, there is
• 2:51
  Speaker 2: a banks required to act.
• 2:53
  Speaker 1: Kim, thank you so much. Kim is asb's acting chief economists.
• 2:56
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• 3:00
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• 3:03
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