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

While every care has been taken in the preparation of this article, AMP Capital Investors Limited (ABN 59 001 777 591, AFSL 232497) and AMP Capital Funds Management Limited (ABN 15 159 557 721, AFSL 426455) makes no representations or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. Past performance is not a reliable indicator of future performance. This article has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this article, and seek professional advice, having regard to the investor’s objectives, financial situation and needs. This article is solely for the use of the party to whom it is provided.

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