NZ economy: constraints to growth

Indicators during the June quarter show the economy bouncing back, although with constraints building.

The BusinessNZ Planning Forecast shows GDP figures holding up well, BusinessNZ Chief Executive Kirk Hope says.

The BusinessNZ Economic Conditions Index sits at 12 for the June 2021 quarter, up 6 on the previous quarter and up 26 on a year ago. Mr Hope said the latter increase was expected, given Covid’s impact on the economy last year.

“But constraints to growth are rising. The longer we face border restrictions and staff shortages, the greater the threat of a two-speed economy with some businesses and sectors going from strength to strength while others continue to lag.

“Other challenges include supply constraints, infrastructure gaps, and business expectations of price rises, alongside a general increase in inflationary pressures,” Mr Hope said.

The BusinessNZ Economic Conditions Index tracks 33 economic indicators including GDP, export volumes, commodity prices, inflation, debt, and business and consumer confidence.

The BusinessNZ Planning Forecast for the June 2021 quarter is on www.businessnz.org.nz

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