The BusinessNZ Planning Forecast for the March 2021 quarter shows the economy in a holding pattern.
The BusinessNZ Economic Conditions Index currently sits at 11 for the March 2021 quarter, down 2 on the previous quarter and up 17 on a year ago (the increase since this time last year reflects businesses and households emerging from last year’s various stages of lock-down).
“Our rate of growth is forecast to be modest until the border is properly reopened. Until then, we face prospects of a two-speed economy, with some sectors and regions growing while others struggle,” BusinessNZ Chief Executive Kirk Hope said.
Recent BusinessNZ Network briefings have shown many firms are close to the edge.
“The Government faces politically difficult decisions over managing the health effects of Covid-19 while minimising its adverse impact on the economy and people’s overall economic and social well-being.
“But it’s important we have a consistent framework enabling the Government and the broader public to understand the nature of current risks and to make decisions appropriate to the degree of risk involved.
“Currently, many in the business community, feel there is no clear pathway forward for dealing with Covid-19, given it is likely to be with us for some time yet. But ad hoc decisions will have a chilling effect on investment,” Mr Hope says.
The BusinessNZ Economic Conditions Index tracks 33 economic indicators including GDP, export volumes, commodity prices, inflation, debt, and business and consumer confidence.