Rob Hosking writes:
The latest run of economic data has only served to reinforce the picture of continued expansion over the coming year.
Even the latest government accounts – particularly the monthly tax revenue data – point to strong underlying economic activity. …
Overall tax revenue is up 9.4% on the equivalent time period. Revenue from direct individual tax, in its various forms, is up 7.9%. Corporate tax – which is, admittedly, always volatile – is up a whopping 16.3%. GST is up 14% – much of which appears to reflect the tourism boom.
So surely time for tax cuts!
The latest year on year GDP growth was 3.6%. The long-term trend is in the region of 2.7-2.8%. The consensus forecast is for 3.5% for the year to March 2017, 3.3% for the following 12 months, and 2.9% for the next 12 months – all above the long-term trend.
Even the most pessimistic forecast for the next three years, UBS New Zealand’s Robin Clements, foresees growth averaging 3.4% for the year to March, 2.9% the following 12 months and 2.5% for the next 12 months.
Manufacturing and services data released in the last week points to continued strength in those sectors: the performance of manufacturing index (PMI) – an internationally comparable measurement – showed the sector averaging, over the past year, a height only seen once since the survey began in New Zealand in 2002.
The manufactured manufacturing crisis lives on in our memories!