Quite a few green shoots!

Business NZ says:

After a prolonged period of stagnation and negative per capita growth, the New Zealand economy is

now expected to expand at just under 3% per annum through to 2027.

Both official and forward-looking indicators point to a steady improvement in the economic outlook as

we enter 2026. Key indicators of growth include:

 Business confidence remains relatively high, as reflected in multiple surveys.

 Massey University’s GDP live indicates solid GDP improvement, while heavy traffic flows—

a reliable real-time growth indicator—are generally rising.

 BNZ – BusinessNZ Performance of Manufacturing Index (PMI) shows increased

activity. The October PMI marks four consecutive months above the breakeven 50 mark, a

milestone achieved twice in the past three years.

 Underlying inflation is returning to target, despite headline rates remaining near the top of

the Reserve Bank’s range.

 Interest rate reductions are easing pressure on struggling households and businesses.

 Credit activity is increasing. Centrix data show new household lending rose 13.2% year-on-

year and mortgage enquiries remain elevated. Business credit continues to climb, up 3% year-

on-year. However, company liquidations remain elevated, with October marking the highest

monthly number of liquidations since 2011.

 Retail activity is starting to increase in real (inflation and seasonally-adjusted) terms.

 NZ dollar movements will boost returns for exporters converting foreign revenue back into

NZ dollars, though this may increase tradeables inflation.

 Agricultural commodity prices remain solid despite some softening in dairy prices as a

result of higher production, both domestically and internationally. Dairy prices have softened,

with Fonterra revising its forecast Farmgate Milk Price for 2025/26 from $9.00–$11.00/kgMS to

$9.00–$10.00/kgMS, lowering the mid-point from $10.00 to $9.50/kgMS.

 Fonterra’s sale of its global consumer and related businesses to French dairy giant Lactalis

for NZ$4.22 billion—subject to regulatory approval—will provide a significant boost to the

regional economy, expected to be completed in the first half of 2026.

 US trade developments are positive, with President Trump’s tariff rollback on beef and other

products benefiting NZ, though this is no substitute for a stable, rules-based international

trading system.

 Tourism is recovering, with inbound numbers increasing, while domestic tourism remains

subdued.

 Infrastructure pipeline projects identified by the NZ Infrastructure Commission present

long-term growth opportunities, though some will require sustained funding.

 Regulatory support from the Government to reduce barriers to business growth continues,

helping lower costs for developers and supporting medium-term developments.

That does give good cause for optimism. That’s a lot of green shoots.

Advanced economies are expected to grow around 1.5% in 2025–26, with the US slowing to 2%

So anything over 2% would be very good for a developed country.