Our September newsletter continues our analysis of New Zealand’s population trends, with Senior Economist Nick Brunsdon looking at household projections and how current building levels compare.
Principal Economist Brad Olsen outlines Infometrics’ decision to raise our peak Official Cash Rate call to 4.50% in mid-2023, amid sustained inflationary pressure.
With skills always in focus given New Zealand’s tight labour market, Senior Economist Rob Heyes examines the new Australian Skills Classifications and what they might mean for New Zealand.
Speaking of a tight labour market, Chief Forecaster Gareth Kiernan outlines the increased pressure on some sectors who are struggling to attract workers given the intense competition around workers and pay.
And finally, Brad rounds out the newsletter with a Chart of the Month showing local election turnout for each council in the country since 1989, ahead of the final day to vote in the 2022 local elections in early October.
Expectations for New Zealand interest rates continue to increase, with inflation remaining persistent and requiring tighter monetary policy to address sticky pricing pressures. Economic activity remains unbalanced, with demand outstripping supply. Our latest assessment of conditions means we have raised our expectations for interest rates, given it is unlikely there will be firm evidence of slowing price rises before the first quarter of 2023.
New Zealand needs more detailed information about the skill needs of each occupation. The Australian Skills Classification (ASC) gives us this. While it has its limitations, it is a vast improvement on what we currently have and will only get better.
The labour market’s tightness over the last 18 months has become increasingly pervasive across all industries and regions. The record-low unemployment rate in the first half of 2022 highlights the difficulties that all businesses have experienced trying to find new staff or retain existing workers. In general, employees have been in a strong bargaining position for higher wages, particularly in the context of the rising cost of living and increasing mortgage rates. It’s little surprise that wage inflation is now the fastest it’s been since the 1980s, at 6.4%pa.
Local elections are currently occurring across the country, with all votes needing to be in and counted by Saturday 8 October. But over time, the number of people actually casting their vote has declined substantially, and in the last local elections in 2019, 35 councils (53%) saw turnout below 50%. So far in 2022, concerns have been raised over the slow progress in voting compared to prior years.
