1 00:00:00,000 --> 00:00:02,400 Speaker 1: They kep another solid week of economic data that confirms 2 00:00:02,440 --> 00:00:05,240 Speaker 1: we are are part of a solid turn around economically. 3 00:00:05,280 --> 00:00:07,640 Speaker 1: Our new retail data spending for fair Ab up two 4 00:00:07,680 --> 00:00:11,040 Speaker 1: point two percent, Auckland North and biggest lived in two years, Palmeston, North, 5 00:00:11,080 --> 00:00:13,680 Speaker 1: o Tigo, Wykato virtually running on rocket fuel at the moment. 6 00:00:13,760 --> 00:00:19,160 Speaker 1: Nick Brunston, Principal Economists and Informetrics, Nick, morning to you. Mike. 7 00:00:19,280 --> 00:00:21,440 Speaker 1: Tell you what I like the discretionary And it's not 8 00:00:21,480 --> 00:00:23,119 Speaker 1: just today's numbers, but the numbers we've seen in the 9 00:00:23,160 --> 00:00:25,840 Speaker 1: last couple of weeks. The discretionary aspect of it. In 10 00:00:25,920 --> 00:00:28,240 Speaker 1: other words, we're buying stuff we don't have to. That's 11 00:00:28,280 --> 00:00:30,680 Speaker 1: about confidence, isn't it. Yeah? 12 00:00:30,720 --> 00:00:33,559 Speaker 2: Absolutely, And those are the areas of retails that have 13 00:00:33,560 --> 00:00:35,319 Speaker 2: been harder over the last couple of years. And we're 14 00:00:35,320 --> 00:00:37,479 Speaker 2: starting to see just about all parts of the retail 15 00:00:37,520 --> 00:00:40,880 Speaker 2: sector are seeing our recovery, including those discretionary areas. 16 00:00:41,120 --> 00:00:42,440 Speaker 1: Is this a trend? Is this real? 17 00:00:44,240 --> 00:00:46,040 Speaker 2: Yeah? It is, I think, and certainly that two point 18 00:00:46,080 --> 00:00:49,880 Speaker 2: two percent result nationally is to be expected, Stating said. 19 00:00:50,000 --> 00:00:52,519 Speaker 2: Retail Trade survey for the December quarter showed a four 20 00:00:52,560 --> 00:00:55,920 Speaker 2: point nine percent increase in retail trade, so it's all 21 00:00:56,000 --> 00:00:58,160 Speaker 2: kind of pointing in the same direction. The strength of 22 00:00:58,200 --> 00:01:01,240 Speaker 2: orphans is a bit surprising to me. Bearing a mind, 23 00:01:01,280 --> 00:01:03,720 Speaker 2: employment in Auckland's down zero point nine percent up to 24 00:01:03,760 --> 00:01:06,479 Speaker 2: the end of last year, so it's spending up two 25 00:01:06,480 --> 00:01:08,640 Speaker 2: point eight but clearly the people that are still employed 26 00:01:08,640 --> 00:01:09,560 Speaker 2: are spending. 27 00:01:09,680 --> 00:01:13,279 Speaker 1: Are you in Auckland, I'm in Wellington, Okay, No, wonder 28 00:01:14,040 --> 00:01:17,360 Speaker 1: if you're in Auckland, you can feel it's real. I 29 00:01:17,400 --> 00:01:20,839 Speaker 1: wonder also how much of it is tourist related. There's 30 00:01:20,840 --> 00:01:22,720 Speaker 1: no hiding from the fact that this country is full 31 00:01:22,720 --> 00:01:24,160 Speaker 1: of tourists at the moment. Is that part of it? 32 00:01:25,360 --> 00:01:28,360 Speaker 2: Yeah, yeah, we are seeing your further recovery and tourism. 33 00:01:28,440 --> 00:01:32,400 Speaker 2: It isn't at a massive rate because we're getting close 34 00:01:32,440 --> 00:01:34,640 Speaker 2: to where we work pre pandemic, so it's sort of 35 00:01:34,640 --> 00:01:37,480 Speaker 2: a more moderate tourism tourism growth, and certainly in an 36 00:01:37,480 --> 00:01:40,440 Speaker 2: area like Auckland, the number of locals outweighs and tourists 37 00:01:40,480 --> 00:01:42,800 Speaker 2: so much. So I would read that two point eight 38 00:01:42,840 --> 00:01:46,080 Speaker 2: percent as a much more of a read on the 39 00:01:46,120 --> 00:01:47,520 Speaker 2: confidence of residents in Auckland. 40 00:01:47,680 --> 00:01:50,920 Speaker 1: What's your vibe on a word? Is it fragile? Is 41 00:01:50,960 --> 00:01:54,640 Speaker 1: it solidifying? What is it robust? 42 00:01:56,160 --> 00:01:59,800 Speaker 2: I was solidifying? And what's the big asterisk being what's 43 00:01:59,800 --> 00:02:01,520 Speaker 2: going on in the Middle East. We know that's going 44 00:02:01,520 --> 00:02:03,760 Speaker 2: to flow through in terms of oil prices. We know 45 00:02:03,800 --> 00:02:06,320 Speaker 2: it's already starting to flow through in terms of shipping prices. 46 00:02:06,520 --> 00:02:07,920 Speaker 2: So that is a little bit of a threat to 47 00:02:07,960 --> 00:02:09,000 Speaker 2: the recovery that we're seeing. 48 00:02:09,840 --> 00:02:12,519 Speaker 1: Is it psychological too? If I'm looking at this war 49 00:02:12,600 --> 00:02:14,400 Speaker 1: and freaking out about it, even though I don't know 50 00:02:14,440 --> 00:02:16,480 Speaker 1: how long it's going to go on? Is that material? 51 00:02:16,520 --> 00:02:18,040 Speaker 1: Do you think? And when will we see that? If 52 00:02:18,040 --> 00:02:18,320 Speaker 1: it is? 53 00:02:20,480 --> 00:02:24,119 Speaker 2: I think that the petrol prices are a pretty key 54 00:02:24,200 --> 00:02:28,440 Speaker 2: kind of I guess guarding staff for people spending confidence, 55 00:02:28,480 --> 00:02:30,959 Speaker 2: and you know, potentially the increases an oil price that 56 00:02:30,960 --> 00:02:33,440 Speaker 2: we've seen already in the early stages of the conflict 57 00:02:34,440 --> 00:02:37,600 Speaker 2: could add up to sort of forty cents to petrol prices. 58 00:02:37,639 --> 00:02:39,880 Speaker 2: I think when people start seeing those prices go up 59 00:02:39,919 --> 00:02:43,359 Speaker 2: and that portion of their weekly spending money disappear on 60 00:02:43,440 --> 00:02:46,160 Speaker 2: the basics, that might knock people a little bit. 61 00:02:46,960 --> 00:02:49,760 Speaker 1: When does the reserve bank get involved? How long does 62 00:02:49,800 --> 00:02:52,280 Speaker 1: it have to go and the economic thing becomes real 63 00:02:52,320 --> 00:02:54,760 Speaker 1: before the reserve bank starts to run a commentary that's 64 00:02:54,760 --> 00:02:56,639 Speaker 1: slightly different from what they were running. 65 00:02:57,520 --> 00:02:59,600 Speaker 2: Both putting aside the Middle East for a moment, Eric 66 00:03:00,240 --> 00:03:03,000 Speaker 2: as it would start rising sort of mid to later 67 00:03:03,040 --> 00:03:06,440 Speaker 2: this year. The situation in the Middle East may help 68 00:03:06,480 --> 00:03:08,400 Speaker 2: a little bit in a sense that if households are 69 00:03:08,440 --> 00:03:11,520 Speaker 2: having to divert more their spending to fuel, that means 70 00:03:11,520 --> 00:03:13,600 Speaker 2: they just simply have less money to spend on everything else. 71 00:03:13,639 --> 00:03:17,440 Speaker 2: So that may reduce domestic inflationary pressures. At the same time, 72 00:03:17,480 --> 00:03:20,000 Speaker 2: when you've got your retailers having to pay thousands of 73 00:03:20,000 --> 00:03:21,960 Speaker 2: dollars more for every ship and container they bring in, 74 00:03:22,240 --> 00:03:25,720 Speaker 2: that could start to push up prices. It's not necessarily 75 00:03:25,720 --> 00:03:28,440 Speaker 2: domestic inflation, you know, those are things that were important, 76 00:03:28,680 --> 00:03:31,160 Speaker 2: but it might have the reserve bank of bitter concerns. 77 00:03:31,280 --> 00:03:33,239 Speaker 1: Yeah, have a great week you Nick, appreciate it. Nick Brunston, 78 00:03:33,320 --> 00:03:37,280 Speaker 1: Principal economist at the app The Good People of Infometrics. 79 00:03:37,320 --> 00:03:40,200 Speaker 1: For more from the Mic Asking Breakfast, listen live to 80 00:03:40,320 --> 00:03:43,400 Speaker 1: news talks that'd be from six am weekdays, or follow 81 00:03:43,440 --> 00:03:45,000 Speaker 1: the podcast on iHeartRadio.