March 20, 2025 • 5 mins
New Zealand's out of recession, but many Kiwis could take a while to feel better off.
Our economy grew by 0.7% in the December quarter – surpassing all economists' expectations.
But unemployment's expected to keep rising this year, and many households are still doing it tough.
Council of Trade Unions Economist Craig Renney told Francesca Rudkin that confidence in the New Zealand economy is still lacking.
He says that many people will need to feel the difference in their wallets in order to believe the economy is recovering.
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Speaker 1 (00:00):
Starting to look out for New Zealand as all signs
point to a stronger economy. The GDP rose by zero
point seven percent in the December quarter, indicating we've come
out the other side of the recession, not in any
great rush, you could say. Council of Trade Unions economist
Craig Greeny is with us now. Good morning, Craig.
Speaker 2 (00:17):
Good morning.
Speaker 1 (00:18):
We're out of the recession. But does it feel that way.
Speaker 2 (00:22):
It won't feel like we're for many people. We're out
of the recession on a quarterly basis, as you say,
we grew zero point seven percent in the last few months,
but on an annual basis, we're still down. We're still
down one point one percent, so you know where we're
certainly stopped the recession, but we're still the economy is
still smaller, and with unemployment rising and the cost of
(00:42):
living still being a real challenge for many people, it
won't feel like we're genuinely seen recovery yet for many
people around our heather.
Speaker 1 (00:50):
What is it going to take for us to feel
like the economy is recovering properly? Do you think I.
Speaker 2 (00:57):
Think many people are going to need to feel that
difference in their wallets going to need to feel security
and confidence. One of the things we know is that
businesses are aren't confident to invest. We saw in the
GDP Day of Today yesterday, then business investments for whether
consumers are going to need to feel confident and go
gotten by a thing, So we saw durable birds, washing machines,
(01:19):
those sorts of things. The consumption of those fell last year.
I think confidence is really lacking still in an ezialand
e colony right now, and that's a function of rising
and employment.
Speaker 1 (01:30):
Sadly, well, we've noticed that we've seen that, haven't we
We've seen a recent slamp and consumer confidence. So there's
growth that we have seen. Do you think it's sustainable?
Speaker 2 (01:39):
You honest? Like everything else in the economics, we'll find out.
But in terms of the next few months, we expect
GDP to keep growing. What happens after that really depends
upon international factors, including Donald Trump and tariffs, and the
extent to which we see more changes at the budget
that again reduce consumer confidence and reduce the confidence of
(02:03):
businesses to invest.
Speaker 1 (02:04):
Unemployment has expected to keep rising. What might every day
workers win? Might every day workers sort of see some relief?
Speaker 2 (02:12):
Well, we keep expecting unemployments to keep rising over the
next year, so employments are lagging indicator. So we started
to see some growth, but it would be a while
before start recruiting in a serious way again, so we
expect an employment to keep rising during the yester. By
the end of twenty twenty five, workers might feel more
confident because of employment's on its way down, but it's
(02:34):
the extent to which again that translates into pay packets
for workers. Forty six percent of workers last year got
to pay rise less than inflation, and we saw many
workers heading over says, particularly to Australia where pain conditions
are better. So it's going to be a while before
or workers feel any benefit from any growth in the economy,
(02:57):
and we saw that in the data yesterday where fits
were rising at more than three times the speed of
wages in New Zealand. So if there is a recovery,
it seems to be tilted towards the side of businesses
at the moment rather than workers in their pay packet.
Speaker 1 (03:13):
The beans itsid yesterday that on a per capita basis,
our forecast seduced the previous peak and activity won't be
achieved until early twenty twenty eight. Would you agree with that?
Speaker 2 (03:23):
Certainly know the GDP per capita has fallen for two years.
It's it's taken a real battering. It's now more it
was in more than five percent lower than it's peak.
It's going to take a very long time to get
back to it. You know, it's peak pre the start
of these falls. I hope it doesn't take that long,
(03:43):
but it may well be that it takes a very
long time to get back to the twenty twenty is
raising it as at the matter, but certainly a long
way off.
Speaker 1 (03:51):
Craig I thought the government. The response from the government
was very restrained yesterday at that positive result. They're very
aware there is a long way to go before New
Zealanders feel like we, you know, probably have turned a
corner or heading to a good place. What do you
want to see from the government in terms of an economic.
Speaker 2 (04:11):
Plan, Well, that's exactly what I'd like to say, is
an economic plan. We had the Going for Growth document
which was their economic strategy, and it was eighty bullet points,
forty of which have already been done. So it's not
really a plan. There's no plan for investment right now.
(04:32):
Investment every falls every year over the next four years
on physical things like roads, schools, hospitals. We don't have
a plan for the workforce. We don't have a plan
to tackle that rising unemployment. We don't have a plan
to help low income families. And it's probably tackle those
things that will start to see the returning confidence, and
(04:55):
that returning confidence will result in higher investments and therefore
more jobs and the great economic security for workers. And
that's what we need at the moment, is is that
sense of an economic plan, and sadly it's still missing.
Speaker 1 (05:06):
Craig, Thank you so much for your time. That was
Craig really their Council of Trade Union's economist.
Speaker 2 (05:12):
For more from early edition with Ryan Bridge. Listen live
to News Talks it'd be from five am weekdays, or
follow the podcast on iHeartRadio.
Starting to look out for New Zealand as all signs
point to a stronger economy. The GDP rose by zero
point seven percent in the December quarter, indicating we've come
out the other side of the recession, not in any
great rush, you could say. Council of Trade Unions economist
Craig Greeny is with us now. Good morning, Craig.
Speaker 2 (00:17):
Good morning.
Speaker 1 (00:18):
We're out of the recession. But does it feel that way.
Speaker 2 (00:22):
It won't feel like we're for many people. We're out
of the recession on a quarterly basis, as you say,
we grew zero point seven percent in the last few months,
but on an annual basis, we're still down. We're still
down one point one percent, so you know where we're
certainly stopped the recession, but we're still the economy is
still smaller, and with unemployment rising and the cost of
(00:42):
living still being a real challenge for many people, it
won't feel like we're genuinely seen recovery yet for many
people around our heather.
Speaker 1 (00:50):
What is it going to take for us to feel
like the economy is recovering properly? Do you think I.
Speaker 2 (00:57):
Think many people are going to need to feel that
difference in their wallets going to need to feel security
and confidence. One of the things we know is that
businesses are aren't confident to invest. We saw in the
GDP Day of Today yesterday, then business investments for whether
consumers are going to need to feel confident and go
gotten by a thing, So we saw durable birds, washing machines,
(01:19):
those sorts of things. The consumption of those fell last year.
I think confidence is really lacking still in an ezialand
e colony right now, and that's a function of rising
and employment.
Speaker 1 (01:30):
Sadly, well, we've noticed that we've seen that, haven't we
We've seen a recent slamp and consumer confidence. So there's
growth that we have seen. Do you think it's sustainable?
Speaker 2 (01:39):
You honest? Like everything else in the economics, we'll find out.
But in terms of the next few months, we expect
GDP to keep growing. What happens after that really depends
upon international factors, including Donald Trump and tariffs, and the
extent to which we see more changes at the budget
that again reduce consumer confidence and reduce the confidence of
(02:03):
businesses to invest.
Speaker 1 (02:04):
Unemployment has expected to keep rising. What might every day
workers win? Might every day workers sort of see some relief?
Speaker 2 (02:12):
Well, we keep expecting unemployments to keep rising over the
next year, so employments are lagging indicator. So we started
to see some growth, but it would be a while
before start recruiting in a serious way again, so we
expect an employment to keep rising during the yester. By
the end of twenty twenty five, workers might feel more
confident because of employment's on its way down, but it's
(02:34):
the extent to which again that translates into pay packets
for workers. Forty six percent of workers last year got
to pay rise less than inflation, and we saw many
workers heading over says, particularly to Australia where pain conditions
are better. So it's going to be a while before
or workers feel any benefit from any growth in the economy,
(02:57):
and we saw that in the data yesterday where fits
were rising at more than three times the speed of
wages in New Zealand. So if there is a recovery,
it seems to be tilted towards the side of businesses
at the moment rather than workers in their pay packet.
Speaker 1 (03:13):
The beans itsid yesterday that on a per capita basis,
our forecast seduced the previous peak and activity won't be
achieved until early twenty twenty eight. Would you agree with that?
Speaker 2 (03:23):
Certainly know the GDP per capita has fallen for two years.
It's it's taken a real battering. It's now more it
was in more than five percent lower than it's peak.
It's going to take a very long time to get
back to it. You know, it's peak pre the start
of these falls. I hope it doesn't take that long,
(03:43):
but it may well be that it takes a very
long time to get back to the twenty twenty is
raising it as at the matter, but certainly a long
way off.
Speaker 1 (03:51):
Craig I thought the government. The response from the government
was very restrained yesterday at that positive result. They're very
aware there is a long way to go before New
Zealanders feel like we, you know, probably have turned a
corner or heading to a good place. What do you
want to see from the government in terms of an economic.
Speaker 2 (04:11):
Plan, Well, that's exactly what I'd like to say, is
an economic plan. We had the Going for Growth document
which was their economic strategy, and it was eighty bullet points,
forty of which have already been done. So it's not
really a plan. There's no plan for investment right now.
(04:32):
Investment every falls every year over the next four years
on physical things like roads, schools, hospitals. We don't have
a plan for the workforce. We don't have a plan
to tackle that rising unemployment. We don't have a plan
to help low income families. And it's probably tackle those
things that will start to see the returning confidence, and
(04:55):
that returning confidence will result in higher investments and therefore
more jobs and the great economic security for workers. And
that's what we need at the moment, is is that
sense of an economic plan, and sadly it's still missing.
Speaker 1 (05:06):
Craig, Thank you so much for your time. That was
Craig really their Council of Trade Union's economist.
Speaker 2 (05:12):
For more from early edition with Ryan Bridge. Listen live
to News Talks it'd be from five am weekdays, or
follow the podcast on iHeartRadio.
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