Kelly Eckhold: Westpac Chief Economist ahead of the Q3 GDP announcement

One of the major banks is predicting some of the best quarterly GDP figures in years. 

Stats NZ is releasing the economic figures for the three months ending September this morning, with the Reserve Bank's forecasting growth of 0.4%. 

Westpac predicts a 0.9% gain, putting that down to a jump in activity across the board. 

Chief Economist Kelly Eckhold told Andrew Dickens it would fill in a hole from the previous quarter. 

But he says there needs to be two or three quarters of growth before people can be confident the country is on an upward trend. 

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Episode Transcript

Speaker 1 (00:00):
So it's didpday the final red for the year. We
had a zero point nine percent drop in June. Banks
are expecting to bounce back now, some are saying one percent.
West Tax Chief economists Kelly Echold who joins me, Now, Hello, Kelly,
good morning, and what do you think.

Speaker 2 (00:17):
Well, then we're going to get a pretty good quarter
this time around. We've got zero point nine percent gain
in the forecast, so basically felling in that hole that
we saw in Q two.

Speaker 1 (00:29):
So where are getting the hint that it's going to
be good? Is that retail figures are.

Speaker 2 (00:32):
One Well, it's actually quite across the board this time,
which is quite encouraging because I mean in previous quarters
where we have seen strength, it's been quite narrowly based,
particularly around the agricultural sector. So what we can kind
of see here and the indicators is that a lot
of the indicators of the services sector center have done
quite well. So we have had decent retail trade, We've

(00:55):
had some decent construction figures, but it does look like
all through the professional services type sectors there's been decent
activity there as well. So we're looking for a broad
based result.

Speaker 1 (01:08):
Is it fair to say that we just got our
mojo back, that we've got some confidence, and now people
are prepared to commit some capital after sitting on their hands.

Speaker 2 (01:17):
I certainly think this is one of the better results
I've seen in a couple will be one of the
better results we've seen in a couple of years, as
even the forecast. You're right because of that broader based nature.
I think it's probably a little bit too early to assess,
because there remains quite a lot of volatility in this data.
You know, for example, what this result would do is

(01:37):
fill in a big hole from the previous quarter. There's
still quite a pronounced seasonal pattern. We need to see
two or three quarters of this before you can really
confidently say that you're on an underlying upward trend. I reckon.

Speaker 1 (01:50):
Meanwhile, I've got we've got the RB who's getting a
bit upset that retail banks are putting their interest rates up,
which is not what they wanted. So and they're going
to get this figure. What do you think this is
going to mean for the RB heading into the new
year and our interest rates?

Speaker 2 (02:05):
Well, I mean, I don't think it means anything for
our interest rates in the short term. And you would
have seen the renew resipient governor on the on the
tapes recently really making that point quite forcefully now that
they're not really looking at the term rate rise, but
this data is going to fill in some of the
hole that they saw in capacity in the economy in

(02:26):
the last year or so. I mean they only expected
and increased zero point four percent in this quarter, so
there's going to be quite a lot better than that,
So they should be probably a lot more comfortable that
the economy is in a better place.

Speaker 1 (02:41):
Kelly, I thank you, and I hope you'll write for
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