Satish Ranchhod: Westpac Senior Economist on the latest Westpac Regional Roundup

It's a tale of two islands when it comes to the economy.  

The Westpac Regional Roundup shows many businesses and households are suffering from the slow economy.  

Westpac Senior Economist Satish Ranchhod says feedback from the North Island was more downbeat, with Wellington being the worst off because of a shrinking public service.  

He says there was a rosier picture in the South Island.  

Ranchhod told Ryan Bridge they’ve got a mix of tourism and agriculture among other industries helping to support a positive sentiment in the South. 

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Episode Transcript

Speaker 1 (00:00):
Right now, though, we're going to Westpac. The regional economic
roundup is out. This is the October report. It's a
bit of a mixed bag. It comes also as Greg
Smith from Devin Funds promotes an aggressive sledge hammer approach
to the OCR We've obviously got a cut coming tomorrow.
But how big will it be? He wants one and
a half percent off by Christmas? That would require seventy

(00:23):
five basis points tomorrow and seventy five basis points in November.
Ranchold is the Westpac senior economists with us this morning statistic.

Speaker 2 (00:31):
Good morning, Good morning Ryan.

Speaker 1 (00:34):
First of all, do you think aggressive cuts like that
are required?

Speaker 2 (00:39):
I think that the scope to cut the OCI pretty quickly,
but not at that sort of pace. While we've seen
that inflation's coming down, unemployed still high, and we've got
tired interest rate, so that makes the case to cutting
the OsO fast paced. We saw during the pandemic that
when you cut reads too quickly can't have unintended consequences.
It could risk supercharging the housing market. Be a different

(01:01):
problem for us altogether.

Speaker 1 (01:02):
Let's look at your region a round up, HOSPO, retail bad,
Wellington bad. We expect those things we know those things.
What were you told about new hiring from businesses.

Speaker 2 (01:13):
What we're hearing is that very few firms are looking
at taking on staff right now. Those pressures are seeing
in terms of demands means that they are more cautious
about taking on stuff and a lot of them have
actually been shedding workers recently.

Speaker 1 (01:27):
Agriculture, tourism are they giving you a bit of hope.

Speaker 2 (01:30):
They are the bright spots of the economy right now.
Tourism has been a boom for regions like Queen Sound.
We're also seeing some better prices for some of our
key experts. That's been welcome for some of our rural regions.

Speaker 1 (01:44):
Southland. I noticed you mentioned Southland and the report that
they are coming off a little bit. Yeah.

Speaker 2 (01:51):
SOUTHLM has seen some more mixed conditions recently. Spending there
has flattened off. But with a mix of conditions there,
especially that posmen in agri places, it's really looking a
bit more flat rather than weak.

Speaker 1 (02:05):
All right, thanks sa much. Just finally that the North
South divide, who is more optimistic right now?

Speaker 2 (02:13):
I think we are seeing some more positive conditions coming
through in the South Islands. They've got that mix of
tourism and agriculture as well as other industries helping to
support sentiment in the North Island. It was clearly a
weaker picture, especially in Wellington for those job whis is
being felt, as well as financial pressures right across the country.

Speaker 1 (02:31):
Statists, thanks so much of your time, Satisha Ranchold with
US Westpac Senior Economists.

Speaker 2 (02:36):
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Speaker 1 (02:40):
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