Cameron Bagrie: Economist on the latest BNZ-BusinessNZ Performance of Services Index, state of the economy

A sign the economy is getting back on track. 

The latest BNZ-BusinessNZ Performance of Services Index shows the sector's grown in June – only the fifth month of growth in the last two and a half years. 

The hospitality industry is continuing to contract, but it’s offset by the good results in transport and storage. 

Economist Cameron Bagrie told Ryan Bridge the car is moving in the right direction – we’re not exactly sprinting or going at a full pace, but we’re certainly moving towards where we need to be. 

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Episode Transcript

Speaker 1 (00:00):
I love text like this, Ryan, How can you copyright
information once it's in the public domain, it's information to
be used, Shirley says Jeff, No, that's not how I mean.
Think of all the songs that are out there or movies.
You can't just go and to steal them and use them,
can you. They are copyrighted even though they're in the
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mining that data and then you turning it into something else.

(00:21):
That's the question also good one here on Ald will
come to that in a second. First, though, we have
the excellent manufacturing number on Friday. Surgeon services seventy percent
of our economy, the engine room of our economy. You
could say we've got a number from them yesterday. Bn
Z Business and Z Performance Services Index for June was
fifty points six. Anything above fifty is expansion. So that

(00:43):
is good, I mean, not sprinting, but running, perhaps in
the right direction. Let's go to Cameron Baggery Independent Economists.
Good morning, Cameron, good morning.

Speaker 2 (00:53):
So thoughts movie in the right direction? You want to
be above fifty because that's saying sort of positive. But
if you look at against the long term average for
that series is around fifty two point seven. So yes,
if you think about that in moding parleance, Yeah, the
car is moving in the right direction, but we're not
exactly sprinding. We're not going at a full pace, but
we're certainly moving towards where we need to be, which

(01:15):
is the positive story.

Speaker 1 (01:17):
So Q one good, Q two bad, Q three all
good again.

Speaker 2 (01:24):
Yes, we look at the reserve banks what's called now
cast of GDP, which is a collection of all these
sort of economic indicators. You've got the Q two, but
it looks like it was basically a zero quarter. So
we're sort of trying to dodge a bit of a
bullet around that. Q two before the accident was going
up around her moose. If you look at a lot
of these time the indicators, they're going to flow into

(01:44):
Q three as well. And the Reserve banks now cast
estimate for Q three GDPs around six zero point six
zero point seven percent for the quarter. It's a diversion.
Are we getting back on tracks?

Speaker 1 (01:57):
Some of the banks reckon we'll do two percent GDP
this year, and they reckon inflation. It's very unemployment rate,
We'll still stay out there quite high. What do you think?

Speaker 2 (02:09):
Yeah, So if you look what we get for Q
one and pointy eight flat for Q two. If we
get a save point six point seven for Q three,
the point five point six for Q four, you're going
to be up in the two percent suit of zone.
Now that that's respectable, that's broad the inline with what
we call the economic speed limit of this economy and
supply side capacity. Will we start to see the unemployment

(02:31):
rate move down immediately in Q three with the economy
moving up? The answer is no, There will be more
like the Q four story. So I think we're getting
a little bit closer to an infliction point for the
job market, But the job market tends to try with
the general economy. If the general economy is just turning
as we speak, which is what we think it is,
and the data is starting to show there, they expect

(02:52):
job creation growth to come with about a three to
four month leg.

Speaker 1 (02:56):
Cameron Begrey, founder of Bager Economics, Good to have you
on the show. As always. For more from earlier edition
with Ryan Bridge, listen live to News Talk Set B
from five a m. Weekdays, or follow the podcast on iHeartRadio.