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Source: New Zealand Parliament – Hansard



Question No. 1—Finance

1. Dr DUNCAN WEBB (Labour—Christchurch Central) to the Minister of Finance: What recent reports has he seen on the New Zealand economy?

Hon GRANT ROBERTSON (Minister of Finance): Westpac has released its latest quarterly review on the economy. The bank’s economists note that New Zealand’s recovery is gaining traction, underpinned by continuing increases in household spending, lower than expected unemployment, stronger construction sector, and firmer activity in the manufacturing sector. They expect economic activity will continue to strengthen over the year ahead, with a continued support from fiscal and monetary policy. However, Westpac warns that the economy is expected to take time to recover as vaccines are rolled out around the world and conditions are set to remain uneven across sectors. Global activity is on the mend, but the recovery is uneven there too.

Dr Duncan Webb: What other reports has he seen on the economy?

Hon GRANT ROBERTSON: Securing the economic recovery in New Zealand has been supported by the manufacturing sector. The BNZ-Business New Zealand Performance of Manufacturing Index remains in expansion mode, at 58.4 in April. This is 5.2 points down from that record all-time high in March, but it’s still the second-highest result since July 2020, when New Zealand came out of lockdown. The main drivers of this result continue to be production and new orders, with manufacturers seeing an increase in inquiries and orders, particularly in the building industry.

Dr Duncan Webb: What reports has he seen on other sectors of the economy?

Hon GRANT ROBERTSON: The BNZ-Business New Zealand Performance of Services Index also expanded, up 8.3 points to 61.2 in April, to reach its highest level since the survey began in 2007. The improvement was widespread, with increases in activities and sales, new orders, and employment. Indeed, the employment component in the index hit a record high of 60.8. Along with the above average employment reading in the Performance of Manufacturing Index, the BNZ’s economists say it suggests a rapid pick up in job growth.