1
00:00:00,000 --> 00:00:01,680
Speaker 1: A lot of focus on our economy this week. We

2
00:00:01,800 --> 00:00:04,400
Speaker 1: got the Q two GDP numbers out Thursday. Alongside those,

3
00:00:04,440 --> 00:00:06,880
Speaker 1: the latest services sector read down a number one point

4
00:00:06,920 --> 00:00:09,280
Speaker 1: four points. We're sitting at forty seven point five in August.

5
00:00:09,280 --> 00:00:14,360
Speaker 1: That is eighteen straight months of contraction. Catherine Rich's the

6
00:00:14,400 --> 00:00:16,960
Speaker 1: Business New Zealand c Owners with us. Catherine, morning to you,

7
00:00:17,760 --> 00:00:19,400
Speaker 1: good morning. We saw a little bit of life in

8
00:00:19,400 --> 00:00:22,480
Speaker 1: retail up zero point nine percent, driven by apparel and hospitality.

9
00:00:22,600 --> 00:00:25,480
Speaker 1: How would you describe it, patche worried problematic? What do

10
00:00:25,560 --> 00:00:25,919
Speaker 1: we got?

11
00:00:27,120 --> 00:00:29,560
Speaker 2: It is patchy. I think what we're facing as a

12
00:00:29,640 --> 00:00:32,400
Speaker 2: tail of two economies. Really we know the primary sector

13
00:00:32,479 --> 00:00:35,360
Speaker 2: is doing quite well, but of course major part of

14
00:00:35,400 --> 00:00:38,919
Speaker 2: the economy is a services sector and we're still seeing

15
00:00:39,240 --> 00:00:42,440
Speaker 2: that part of the economy really facing challenges. And that's

16
00:00:42,479 --> 00:00:47,879
Speaker 2: what our PSI result shows eighteen months of contraction. But

17
00:00:47,960 --> 00:00:50,040
Speaker 2: on the other side, we're seeing from the Business New

18
00:00:50,120 --> 00:00:52,880
Speaker 2: Zealand Sentiment Survey a bit of an uptick in the

19
00:00:52,920 --> 00:00:56,480
Speaker 2: way firms are considering investment, particularly for next year. So

20
00:00:56,560 --> 00:00:57,240
Speaker 2: that's positive.

21
00:00:57,560 --> 00:01:00,400
Speaker 1: So we had those numbers just before seven o'clock. The

22
00:01:00,440 --> 00:01:04,320
Speaker 1: intent is driven by what is it driven by? Hope

23
00:01:04,440 --> 00:01:07,000
Speaker 1: or is it driven by some tills actually rung and

24
00:01:07,040 --> 00:01:08,199
Speaker 1: I've got some money to spend.

25
00:01:09,480 --> 00:01:12,040
Speaker 2: I think it's a combination of hope. But for those

26
00:01:12,120 --> 00:01:15,800
Speaker 2: people who follow the news closely, they do see that

27
00:01:15,840 --> 00:01:19,319
Speaker 2: the government's trying to pull every single economic growth lever

28
00:01:19,400 --> 00:01:22,880
Speaker 2: it possibly can with changes to immigration and tax and

29
00:01:22,959 --> 00:01:25,759
Speaker 2: the RMA, and I could list out the rest of them.

30
00:01:26,200 --> 00:01:28,960
Speaker 2: People know what they are, but I think also some

31
00:01:29,120 --> 00:01:33,040
Speaker 2: understand it's an incredibly long lead time and so while

32
00:01:33,240 --> 00:01:37,920
Speaker 2: some of those changes aren't immediately obvious for twenty twenty six,

33
00:01:37,959 --> 00:01:39,880
Speaker 2: a lot of those changes will come to fruition.

34
00:01:40,280 --> 00:01:43,280
Speaker 1: Yeah, you how much weight do you place on consumer

35
00:01:43,319 --> 00:01:45,960
Speaker 1: confidence in the sense that how many people do you

36
00:01:46,000 --> 00:01:48,320
Speaker 1: think are in a funk because they've decided to be

37
00:01:48,360 --> 00:01:50,560
Speaker 1: in a funk as opposed to they could probably have

38
00:01:50,560 --> 00:01:52,160
Speaker 1: a different attitude if they wanted.

39
00:01:54,000 --> 00:01:57,200
Speaker 2: I think there is an element of being a small

40
00:01:57,280 --> 00:02:02,480
Speaker 2: country where we can talk ourselves into a bit of

41
00:02:02,480 --> 00:02:05,160
Speaker 2: a funk. But that's why I think the Business New

42
00:02:05,240 --> 00:02:08,799
Speaker 2: Zealand data about both our Performance of Manufacturing Index and

43
00:02:08,840 --> 00:02:14,440
Speaker 2: our Performance of Services Index are good leading indicators because

44
00:02:14,520 --> 00:02:19,360
Speaker 2: they show economists what businesses are thinking today and the

45
00:02:19,440 --> 00:02:23,200
Speaker 2: future The issue with the primary sector is that yes,

46
00:02:24,000 --> 00:02:27,040
Speaker 2: it's doing well, but there's not a lot of indication

47
00:02:27,160 --> 00:02:30,120
Speaker 2: that it's flowing through to spending. And I think some consumers,

48
00:02:30,800 --> 00:02:36,960
Speaker 2: even with changes to the ocr and other more upbeat indicators,

49
00:02:37,080 --> 00:02:39,480
Speaker 2: they're still saying, Look, I'm not one hundred percent sure

50
00:02:39,560 --> 00:02:41,240
Speaker 2: I trust that, yet I'm still going to keep my

51
00:02:41,280 --> 00:02:42,440
Speaker 2: hand in my pockets.

52
00:02:43,320 --> 00:02:45,680
Speaker 1: Yeah, all right, okay, I appreciate it. Catherine Catherine Rich,

53
00:02:45,680 --> 00:02:48,560
Speaker 1: who's the Business New Zealand CEO, bit worried about what

54
00:02:48,600 --> 00:02:50,760
Speaker 1: Andrew Keller has said earlier on in the program that

55
00:02:51,040 --> 00:02:53,320
Speaker 1: you know, we've talked ourselves into the potential of something

56
00:02:53,360 --> 00:02:55,840
Speaker 1: happening this year economically and it hasn't and whether or

57
00:02:55,880 --> 00:02:57,720
Speaker 1: not it may not actually come to pass. But as

58
00:02:57,720 --> 00:02:59,400
Speaker 1: I say, the GDP numbers out on Thursday.

59
00:03:00,120 --> 00:03:01,760
Speaker 2: More from the Mic Asking Breakfast.

60
00:03:01,960 --> 00:03:05,280
Speaker 1: Listen live to News Talks at b from six am weekdays,

61
00:03:05,520 --> 00:03:07,560
Speaker 1: or follow the podcast on iHeartRadio.