Wednesday, 4th September, 2019

Global and local economic news continues to sour, on balance. The trade war shows every sign of worsening, and the impact of such is increasingly showing up in hard data and forecasts. Indicative of such, consensus forecasts for NZ’s trading partner growth have been revised down again, and now sit at 3.4% for 2019 and 2020. Local ‘soft’ data has tended to shift southwards too. Business confidence figures released last week fell again, with firms seeing an increasing risk the economy hits stall speed (see chart ‘o’ the week). We still think this outcome will be avoided given the support from a humming construction sector and the high terms of trade. Still, the risks of a more protracted slowdown are rising.