New Zealand Insights - June 2018

By AMP Capital

The New Zealand economy is in fundamental good shape, though growth has proven softer than expected in the early part of 2018. The economy is close to running at full potential and has already maxed out capacity in the building and construction sector. Employment growth has slowed as the labour market has closed in on full employment, and population growth is moderating as net migration slows. The biggest risk to the growth outlook is low business confidence, with mycoplasma bovis a major factor impacting confidence levels and the farming community. But on a brighter note, New Zealand’s merchandise terms of trade remain close to record high levels.

Key points


Annual pace of growth has slowed


Expect fiscal policy to deliver a boost to growth in the second half of the year


Business confidence still negative


External sector in good shape


Labour market continues to tighten


New Zealand dollar has weakened in recent months

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Important notes

This article has been prepared to provide general information and does not constitute 'financial advice' for the purposes of the Financial Advisors Act 2008 (Act). An individual investor should, before making any investment decisions, consider the information available in the relevant Product Disclosure Statement and seek professional advice. While every care has been taken in the preparation of this document, AMP Capital Investors (New Zealand) Limited and the AMP Group (together, 'AMP') make no guarantee that the information supplied is accurate, complete or timely and do not make any warranties or representations in respect of results gained from its use. The information is not intended to infer that current or past returns are indicative of future returns. The views expressed are those of the author and do not necessarily reflect those of AMP. These views are subject to change depending on market conditions and other factors.

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