Why Are We Talking Ourselves Into a Recession?
It’s not news that political commentators and politicians themselves tend to have a habit of placing a negative spin on things; simply put, and sad as it is, good news doesn’t sell as well as doom and gloom! But lately, the pessimism surrounding our economy has increased to the point whereby it looks as though we’re at risk of talking ourselves into a recession, and why would we want to do that? From where I’m sitting, there are plenty of reasons to be upbeat about New Zealand’s economy and proud of where it is going!
Sure, our dairy industry is not looking so healthy, and we’re all aware that Fonterra has announced their restructure with some downsizing. This isn’t surprising with their sale prices now tanking, having hit a record $8.40 a kg in 2013/4 to $4.40 in 2014/5, with analysts expecting it to fall further. As some dairy farmers edge into red, Fonterra Chief Exec himself has acknowledged that the country as a whole is getting bogged down by low dairy prices. But surely we shouldn’t just focus on the negative? This is just one aspect of our economy, albeit a considerable one – there are other areas that are flourishing.
I was at a conference last week when the issue of negativity surrounding the economy came up. Conversely, the consensus among the group was that there is actually plenty to be excited about! For one, the Christchurch rebuild is significantly powering our construction industry with Fletcher Building set to build 237 new homes within the next two years. And given the difficulties facing first home buyers, it’s even more fantastic that at least 89 of these new builds will be affordable homes for Kiwis. In fact, Fletcher Construction’s order book has reached its highest to date, at two billion dollars; I’d say that’s pretty positive for our economy!
Following from there, another reason to celebrate, not lament, our economy is the low interest rates, encouraging investment and allowing New Zealanders to achieve their property goals whilst decreasing the costs of company debt. Furthermore, the lower Kiwi dollar is great news for our manufacturing and export sectors, giving us better return, which, of course, directly affects the economy. In fact, our exports are surging, which is great news for a trading nations like ours. Given that we export far more than just dairy, we’re showing that we’re not the “one trick pony” that some naysayers think we are!
Tourism is, of course, travelling along well as our total visitors are up by 7%! That’s a great statistic for New Zealand’s economy, as our country gets more exposure. What’s more, with total expenditure up 21%, we’re surely reaping the rewards of foreign currency being spent on our shores!
Let’s not get bogged down by tales of economic woe, nor become complacent, but rather, embrace the exciting realities unravelling for New Zealand.