Economy took off in Dec quarter

BusinessWire is reporting that the economy boomed in the December quarter:

New Zealand’s economy surged in the December quarter to the best level since mid-2007, according to the Quarterly Survey of Business Opinion, which shows firms are more optimistic and output is increasing across the board.

The survey, conducted by the New Zealand Institute of Economic Research (NZIER), shows a rebound in activity, particularly in Canterbury but also a “very good lift” in Auckland.

The survey’s measure of business confidence rose to plus 19 percent in the December quarter from minus 1 percent in the previous quarter. A positive reading indicates more optimists that pessimists.

The trading activity indicator surged to best level since mid-2007, rising to plus 8 percent from minus 4 percent in the previous quarter. 
“Capacity pressures are intense in Canterbury, but there is little pressure in the rest of the country,” said NZIER principal economist Shamubeel Eaqub.

“Firms do not intend to raise prices much. Consumer price inflation will remain low,” he said, predicting that the Reserve Bank of New Zealand will keep interest rates on hold for some time.

The NZIER survey results are consistent with annual growth of above 2 percent for 2012.

NZIER said that the pickup in the economy is not yet flowing through to the labour market. New hiring remains subdued and labour is getting a little easier to find outside Canterbury.

This s great news, though I am sure Labour will find some way of criticising it.


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  • GregM

    I certainly noticed an improvement in Nov-Dec. I made a small profit both months and I am now feeling pretty positive about the year ahead.

    • jonno1

      My monthly income fluctuates wildly so I tend to take a long view. Dec/Jan are often a bit quiet as my corporate clients tend to be at the beach. But I have enough work for the rest of this month, so overall a good year.

      BTW the two clients who failed to pay on 20 Dec [mentioned in a previous post] both paid on Jan 14, bless ’em. So just a minor clerical glitch really.

      • GregM

        Good to hear about your overdues being sorted Jonno.
        I am pleased to report as at 1.30 am I have just nailed another contract, another new client for 12 months. Things are still tighter than a fishes arse, but the opportunities are definitely out there again. Bring it on !!

        • jonno1

          Well done GregM. It looks like you work some silly hours as I sometimes do – overseas clients maybe. I know this sounds a bit crazy, but I try to maintain a cash float (in short term deposits) that will cover up to a year’s wages. Call me old school, but it means I sleep well at night, can take a holiday at short notice, and can draw on it for capital investment if needed without borrowing (eg a new Beemer, although I will check out the VW range, or another property with substantial deposit). My dad taught me that cash is king, and he was right. But I’ve also cut down my working hours as I’m getting on a bit! Hence time to make the odd blog comment.

  • Simo

    Our clients have been reporting the same thing, more positive customers and the confidence to spend. A good year coming up, a better year in 2014 will bury Liarbour
    with Green Taligrubbies, Paranoid Norman and The Toad

    • Allyson

      So true. An economic boom will be disastrous to the left wing axis of evil.

      • Cadwallader

        Well said! My business has started the year very well too. Dare I say it? The positive start is in part due to a significant number of Kiwis returning from overseas…not just Australia either. NZ’s economy, if you wish to work, is utterly brilliant.

        • Two weeks into the year, we’ve already had two new staff start with us, and we’ll be past 50 staff soon. Just paid the GST today for Oct/Nov and it was well up on the same period in 2011, so even Bill English and Peter Dunne will be happy!

  • Now if we can stop our Minister of Finance being so damn negative. Yet the Crown needs to get its books back into balance but for heaven sake Bill – TALK UP OUR ECONOMY.

    We have skills, we have resources, we have hard working kiwis who just want to get on with it. Give them the encouragement (and support) and you might find confidence growing even more

  • AnonWgtn

    Nah – Rogue Poll – Labour says so.

  • 4077th

    I can also attest to an increase in business confidence not just here but in the rest of the world. Our little company is an exporter of technology goods made here in NZ by us. We have a very specialized market mostly government, universities and research establishments. For the first time in 4 years we have had a very busy December and January with our order books full until at the earliest May this year.

    Because I am responsible for the business in its entirety and keep a very close eye on the numbers and the trends. From May 2010 to now we have increased sales by 20% and profits have doubled year on year (some price rises) since then. Japan is recovering after the tsunami and the US is creeping back up there into an average of 30% of our business with the balance coming from the rest of the world.

    We do export to China but interestingly they are only 6% of our business but are growing steadily. The Chinese market is not the golden goose everyone has predicted and will not be for many years to come. Anyone who is ploughing money into export opportunities in China should have their head read (unless it is the likes of Fonterra, Rio Tinto or BHP). Sell your wheres there by all means but do not rely on it as the prime opportunity.

    We are looking at a very strong year ahead on par with 2006/07 when our business was at its peak. This is good news for us given the world is supposedly still in recession. Luckily for us Science and Physics know nothing about recession they just get delayed.

    • Gazzaw

      My God 4077th I had no idea that you were a rich prick industrialist living off the backs of the workers. Just wait till 2014, you and all your ilk will be squeezed dry like lemons by Minister Norman to bring some equality back into our society. CGT, transactions tax, wealth tax, increased company tax, ETS increase, green taxes and a healthy increase of the minimum wage should do it (for the first year).

      • 4077th

        Our lowest paid person is on $25 per hour. I have 2 over sixties employees who I would not trade for the world and a new asian immigrant who is probably the best investment I have made in the last 7 years. We pay well over the odds and employ people who want to work. Given those circumstances I’m sure the watermelons and leftards would happily tax us so my employees are forced to quit or move…end of business…well done! I really don’t think I could stomach another socialist government I would rather relocate my business to where a government would appreciate us.

  • Gee

    But couldn’t productivity be increased by having a Capital Gains Tax, building more railwaylines and less roads, building 10,000 state houses a year for ten years, and increasing taxes on the wealthy?

    • stinkeye2

      Guess who pays for the state houses and the people living in them? The productive people!

    • hagar

      Yeah, finishing one house every hour on tne hour 24/7 for 10 years would certain boost the economy, probably done by PPP (unless labour creates a state corporation to hire, manage, build these houses….) Ah pigs fLY!!!

    • Goldie

      Gee wrote: “But couldn’t productivity be increased by having a Capital Gains Tax, building more railwaylines and less roads, building 10,000 state houses a year for ten years, and increasing taxes on the wealthy?”

      Umm do you have a clue what productivity actually means? Productivity means producing more out of fewer resources (or more output for less input).
      More railway lines would be counter-productive because railway lines are slow, inflexible and inefficient.
      Less roads would be counter-productive, because a major constraint on economic growth is the poor roading network.
      Building 10,000 houses would be counter-productive, because it would pull resources from doing things like building factories, fibre networks and roads and put it into unproductive shit housing that will be used to fuel rampant housing speculation.
      Increased taxes on the wealthy will have the dual effect of causing talented productive people to leave NZ and lower investment in productivity (see what is happening in France at the moment).

  • Gazzaw

    So where is the Nat’s PR machine to talk this up? Still on holiday maybe? Let’s just leave it to Winston to give the the waiting media five good reasons why the results should have been so much better and put the Nats on the back foot to explain it away. It’s the Hobbit scenario all over again.

  • pukakidon

    This is great news. However it could all come tumbling down if the idiots get back in power. It seems cyclic, as soon as we start getting to good financial times, Liarbour come along and squander our birthright. We need to get Norman a job with the UN like Helun, at least he can squander someone else s money.