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Speaker 1: So the week of grim economic news continues today. We're

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Speaker 1: going to get the GDP data later this morning, and

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Speaker 1: it is expected to tell us that we are back

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Speaker 1: in recession for the third time in two years. Asb's

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Speaker 1: chief economist Nick Toughley is with us.

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Speaker 2: Now, Hey, Nick, Merry Christmas.

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Speaker 1: Ever, merry Christmas to you two. Are you also picking

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Speaker 1: a fall of about zero point four percent?

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Speaker 2: Yeah, we've got zero point four percent, the market consensus

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Speaker 2: about mine and zero point two and that's where the

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Speaker 2: Reserve Bank is. The thing we've got to be mindful

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Speaker 2: of is that there's also some revisions coming along, So

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Speaker 2: that could mean that what we think happened in September

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Speaker 2: that even could be a little bit out. So just

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Speaker 2: watch for quite a lot of quite an event call relief.

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Speaker 1: So if it does come through like that, are we

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Speaker 1: looking at potentially manufacturing having quite a big pullback. But

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Speaker 1: we are being saved a little bit by the farmers

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Speaker 1: who are dragging us through this.

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Speaker 2: It's a little bit like that. Look, we've got all

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Speaker 2: that retail pressure, the construction sector pressure, and that's flowing

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Speaker 2: through the manufacturing before you even add on the impacts

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Speaker 2: of the electricity challenges that we had over the quarter

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Speaker 2: as well, where you had quite a bit of shuttering

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Speaker 2: of some of our sort of large manufacturers as well,

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Speaker 2: and the electricity sector was basically burning anything expensive and

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Speaker 2: flama were refined to generate electricity. So the value we

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Speaker 2: had out of that sector we put in miserable too.

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Speaker 2: But yes, really good production coming through in the dairy

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Speaker 2: side for us. We're looking like there was a bit

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Speaker 2: of activity picking up in there, so that's helping that

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Speaker 2: good sector and also a slowing service sector out.

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Speaker 1: So can we say that if we're going to take

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Speaker 1: some good news out of this, it's that way through

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Speaker 1: the worst of it.

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Speaker 2: Yeah, I'll say there's two bits of news. We can

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Speaker 2: focus on the good side here. Hopefully this is the

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Speaker 2: last sort of sustained contraction that we see and from

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Speaker 2: here on in it's gradual recovery. And there are the

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Speaker 2: early signs that we're all feeling a little bit happier

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Speaker 2: and we found our wallets somewhere. The second thing is

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Speaker 2: that we likely to see the sort of more complete

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Speaker 2: revisions coming out that suggest the level of GDP at

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Speaker 2: the start of this year was nearly two percentage points

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Speaker 2: higher than what we previously thought so that basically says,

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Speaker 2: you know, the economy held up a bit better, our

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Speaker 2: productivity wasn't quite as bad as what we thought. Having

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Speaker 2: said that, it still felt pretty tough out there for

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Speaker 2: a lot of people this year.

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Speaker 1: Yeah, and is it not going to still feel I mean,

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Speaker 1: even though we're through the worst of it's still going

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Speaker 1: to feel tough next year because we're looking at pretty

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Speaker 1: flat growth potentially, it's a forecast of about zero point

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Speaker 1: five percent, and still per capita, we're going backwards, aren't we.

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Speaker 2: Well, we think we'll be back into I guess the

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Speaker 2: heck headline growth coming through with the next quarter and

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Speaker 2: more starting to look progressively more solid next year and

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Speaker 2: getting out of a per carefitter recession, and it's going

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Speaker 2: to be a case of more of a gradual turnaround.

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Speaker 2: Like one of the big things obviously that's caused this

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Speaker 2: slowdown and the pain has been higher interest rates. They

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Speaker 2: are on the way down, but because we've got a

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Speaker 2: lot of people on fixed rate mortgages, it just takes

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Speaker 2: a while for that impact to flow through and it

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Speaker 2: will pick up. It will pick up momentum, just in

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Speaker 2: the short term. We've had a lot of people fixing

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Speaker 2: for say six months, so that they sort of hopefully

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Speaker 2: benefit from much lower rates next year. So it's bud

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Speaker 2: the impact right now. It'll really pick up next year.

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Speaker 1: Good Steffanickay, thanks very much. Enjoy your holiday break. That's

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Speaker 1: a Nick Toughly asb's chief economist. For more from the

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Speaker 1: My Asking Breakfast, listen live to news talks. It'd be

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