Nick Tuffley: ASB Chief Economist says GDP has had a strong rebound in the second half of the year

There are signs that green shoots are starting to flourish economically. 

The latest card spending data from Stats NZ shows retail spending was up 1.6-percent last month, compared to November last year. 

Spending was up across the board - on the likes of groceries, household items and clothes.

ASB Chief Economist Nick Tuffley told Ryan Bridge that the GDP for the second half of the year has had a strong rebound. 

He says they're expecting 0.8 percent for the upcoming quarter.

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Episode Transcript

Speaker 1 (00:00):
Retailers are smiling today. This is after finally we are
seeing people part with some of their hard earned cash.
For November, retail cards spending up one point six percent
for the month compared to the previous year, setting a
positive tone ahead of Christmas. Nick Tuughley is asb's chief
economist with me, Nick, Good evening evening. So we're finally
feeling a bit better. We're finally going out and spending stuff.

Speaker 2 (00:22):
Yes, we are. We look like we had a pretty
good time and have been spinning up it on the duryabols.
So those green shoots starting to flourish a bit more.

Speaker 1 (00:31):
Are we just spending more because things are more expensive
or are we actually buying more stuff?

Speaker 2 (00:37):
Well, it does look like we are buying more stuff.
We did see in the third quarter that the retail
sales volumes as well as the values were up quite strongly,
so nearly two percent over the quarter. So it looks
again like this will be a lift in both the
volume and the value of what we're spending. So not
just about prices. It doesn't like we're buying more stuff.

Speaker 1 (00:57):
Great, what about we're getting a GDP number next week
of course for quarter three, which is backwards looking for September.
But you're expecting it to be better than what you
originally thought, are you.

Speaker 2 (01:08):
Yes, we're expecting point eight percent now, so not too
long ago. We're expecting point five in point sixteen point
seven now point eight, And the manufacturing survey that was
out today suggested that Q four is going to be
pretty good. So at the moment, we're forecasting previsionally one
percent for that quarter. So it does it like the
second half of the year has seen quite a bit

(01:28):
of a rebound.

Speaker 1 (01:29):
And also the first half. I keep going on about
this because it kind of annoyed me. And this is
the problem with the data is it's never accurate on
the day it comes out, right. But do you think
we will revise down? They will revise down next week.
The very bad number we got for quarter.

Speaker 2 (01:44):
Two, Well, it's very possible that that point nine per
cent contraction gets revised or something a bit smaller. But
you've also got to be very mindful though that when
we're with this December release, we get a lot of
annual revisions coming through, so we could see some revisions
going back quite some time. But look, it would be
a good Christmas present if we see that big contraction
in the second quarter get revised to something a bit

(02:06):
smaller than what it was.

Speaker 1 (02:07):
Next year, they reckon, we're going to grow faster than Australia.
We're going to go faster than the Americans. We are going
to go faster than the British and the year after
that too, do you well, we do have.

Speaker 2 (02:17):
Over two and a half percent growth predicted for next
year and some things we're not too bad the year
after that, So look, it is possible. I think one
thing we've got to bear in mind before we pat
ourselves on the back too much, is that we've come
from one of the weaker economies recently, so we're sort
of getting back and growing above trend because we've been
in a bit of a bit of a rut, whereas
other countries slightly different circumstances. Australia's held up much better

(02:41):
than we have over the last couple of years, if anything.
That's still grappling with high inflation, and the US has
been sort of strangling itself a little bit with tariffs
for example.

Speaker 1 (02:50):
Fascinating stuff. We'll look forward to next week's number. Nick
Tuley asb.

Speaker 2 (02:54):
For more from Heather Duplessy Allen Drive.

Speaker 1 (02:57):
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