Michael Gordon: Westpac Senior Economist says not to expect major growth in today's GDP figure

An economist is warning not to expect big growth in GDP figures out today. 

Data —due out from Stats NZ just before 11 this morning— is expected to show the economy has been pulled out of recession, but is still crawling to recovery. 

Economists are predicting growth of between 0.3 and 0.5%.  

Westpac senior economist Michael Gordon told Ryan Bridge he's predicting flat growth in the fourth quarter. 

He says there have been signs things are turning, but it's likely to have happened in the beginning of this year. 

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Episode Transcript

Speaker 1 (00:00):
There is hope the economy bounced back to life in
the December quarter. We're getting numbers today. GDP figures will
be revealed this morning. Most economists are picking growth, albeit
not much. It's pretty slim. Most projections between point three
point five. Westpac is sitting at the point more optimistic end.
Senior economist Michael Gordon is with me this morning. Michael,
Good morning, Michael, good morning.

Speaker 2 (00:24):
Hey, good morning.

Speaker 1 (00:25):
So why a bit more optimism from you?

Speaker 2 (00:29):
I wouldn't really call it optimism. I think there's within
the range of forecasts. It's sort of at the upper end.
But I think the number that we're going to see
today there's potential for it to be boosted by some
technical issues. It's a little tricky to explain, but this
I think there's been ongoing issues with kind of understanding
the pattern of growth throughout the year. There's some changes

(00:50):
that stats New Zealand did last time, I think to
not to my mind, have probably not helped with understanding that.
I think if you if you go through sector bisect,
what it looks to me is probably more like flat
for the quarter. There have been some signs of things
turning that it's probably been more in early twenty five
than in late twenty four.

Speaker 1 (01:09):
And whatever that number is, I mean, let's hope that
it's obviously positive. But whatever the number is, it's going
to be led by, isn't it primary exporters doing the
heavy lifting.

Speaker 2 (01:20):
Yes, certainly we've had some good conditions for exporters, strong
milk collections really this season, and some pretty decent prices
for dairy and milk. I mean, good prices don't go
directly into GDP, but that turns into farmers income, that
turns into spending in the regions and so on. So
that's certainly a helpful factor. We're tending to see the

(01:41):
more I guess, the more sectors that are focused on
the local markets still struggling, and especially things like construction
still really and is quite a steep downturn.

Speaker 1 (01:51):
Looking ahead, I mean looking at a quarter one twenty
twenty five, and I know we're about to look backwards today,
but looking ahead, you had that confidence survey yesterday. I
think you know, Key is feeling a bit jittery. Is
that going to impact spending? Does this delay the recovery?

Speaker 2 (02:07):
Yes? Certainly interesting that that kiey consumers are you know,
focused on things like the global uncertainty, given that it
hasn't so directly touched us yet, there's always the risk
that we get something much more tangible when Trump comes
out with his beautiful tariffs on April seconds. But it's

(02:27):
something that's playing on people's minds. While we are seeing
some pick up in the actual spending numbers, it's been
pretty gradual. People are still waiting to feel the relief
for lower interest rates in many cases as well.

Speaker 1 (02:37):
Yeah, and a little bit spoke by what's happening over
in the White House, Michael, Thank you for that. Michael Gordon,
who's THEES senior economist with WES PAC. This morning, we'll
have the number here on News Talk News TALKSB for
you later on this morning. This is a JEDDP for
fourth quarter last year, finally after how long. I mean,
you look at those numbers yesterday on consumer confidence and

(02:58):
honestly it's a bit depressing because for the last basically
the last twenty years pre COVID, we were in the positive,
we were feeling good. There was a blit during the GFC,
but then the last five years basically since twenty twenty
one ish twenty twenty twenty twenty one, we have been negative,
our confidence has been negative, and we were within three

(03:19):
points of getting back to positive, and we've slid again
thanks to well bit of fear about Trump and his tariffs.
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