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Good growth but international risks

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The BusinessNZ Planning Forecast for the September 2018 quarter shows continued growth but with some easing expected.

BusinessNZ Chief Executive Kirk Hope says global markets could bring risks over the medium term.

"Increased economic growth in China and the US indicate better investment and employment prospects, however protectionism and continuing high debt are bringing a large amount of uncertainty.

"The risk of a financial correction and the impact of interest rate rises are weighing on future growth prospects and New Zealand, as international trader, would not be immune from any fallout."

Mr Hope said uncertainty was the likely cause of current low levels of business confidence.

The New Zealand economy is forecast to grow at around 3 percent over the next two years and terms of trade, driven by meat and dairy returns, are robust.

Meanwhile there is currently little pressure on the Reserve Bank to raise interest rates and the exchange rate is still relatively favourable to exporters.

Domestically, employment continues to grow and unemployment has stabilised at the low rate of 4.5 percent.

The BusinessNZ Economic Conditions Index sits at 5 for the September 2018 quarter, up 1 on the last quarter and up 3 on a year ago.

The Economic Conditions Index tracks 33 economic indicators including GDP, export volumes, commodity prices, inflation, debt, and business and consumer confidence.

The BusinessNZ Planning Forecast for the September 2018 quarter is on www.businessnz.org.nz.

  • Source: A BusinessNZ release