Over the weekend, it was very encouraging to see the number of new COVID-19 cases continue to trend down. This demonstrates NZ’s Alert Level 4 lockdown is working – and not just slowing the virus spread but stopping the spread. For now, elimination remains NZ’s best strategy for both the economy and health outcomes. Elimination means back to “normal” faster and enables the economy to quickly bounce back. We currently expect Q3 GDP to contract around 6-7% due to the NZ community outbreak and the subsequent lockdown. And assuming elimination is successful, we expect GDP to bounce back over Q4 – with an 8% rebound pencilled in.
Some may have been disheartened last week to see Australian states New South Wales and Victoria give up on the elimination strategy, after failing to stop the spread of the Delta variant in these communities (RIP trans-Tasman Bubble). But NZ should not take this is a sign of inevitable defeat. Google uses its popular maps app to measure changes in people movement, and it’s provided a great insight into the effectiveness of lockdown restrictions. Comparing Auckland with New South Wales (NSW) and Victoria (see charts below), NZ’s Alert Level 4 has been more effective at keeping more people at home and reducing the number of people needing to physically be at retail locations. This comparison clearly shows that restrictions in NSW and Victoria were on par with NZ’s Alert Level 3 in limiting the movement of people, not Alert Level 4. Alert Level 4 restrictions are hard and stressful, but a month here will be better than staying at Alert Level 3 for a number of months as has been the case for NSW. Furthermore, disappointing US employment figures over the weekend show that living with the virus before most people are vaccinated does slow and inhibits economies’ ability to recover.
Originally hailing from sunny Nelson, Jane moved to Auckland to join the ASB team in 2008. As Senior Economist, Jane's main focus is co-ordinating the team’s macro-economic forecasts. In this key role, Jane was thrilled by the team’s twice consecutive win of the Consensus Economics Forecast Accuracy award.
During her decade-long career in economic forecasting, Jane has gained a thorough knowledge of the New Zealand economy. Her current focus is on New Zealand GDP growth, including both manufacturing and the construction sectors. She has spent time forecasting most sectors of the economy, including inflation, trade, housing, labour and financial markets.
Prior to joining ASB, Jane honed her macro-economic forecasting skills at the Reserve Bank of New Zealand. Jane is a qualified scarfie, attending Otago University and graduating with a Bachelor of Commerce in Economics with 1st class honours. In 2014, she took a career break from ASB to travel the world and learn to snowboard.
Mark joined ASB in 2017, with over 20 years of public and private sector experience working as an economist in New Zealand and the UK.
His resume includes lengthy stints at ANZ and the Reserve Bank of New Zealand, and he has also worked at the Bank of England, HM Treasury and the New Zealand Transport Agency. Mark's areas of specialisation include interest rate strategy, macro-economic analysis and urban economics.
Born and bred in the Waikato, Mark studied at Waikato University where he graduated with a Master of Social Sciences, majoring in Economics.
Mark's key strengths are the ability to use his extensive experience, inquisitive nature, analytical ability, creativity and pragmatism to dig a little deeper and to deliver common sense solutions to tackle complex problems.
When not at work Mark likes to travel, keep fit and spend time with his friends and family.
Mike joined ASB in 2019 armed with almost 15 years of experience in applied macroeconomic and financial markets analysis.
Mike's career has been all about distilling the risks and opportunities of economic and financial market trends for business. Basically asking the "what does it all mean" question. Mike's enthusiasm and skill for drawing out practical, commercial insights from the murky world of economics has been honed over a relatively broad base of experience.
After spending the early part of his career on the tools at the Reserve Banks of both NZ and Australia, Mike had a lengthy stint at BNZ where he was NZ’s top-ranked currency strategist. His regular and topical macro research also saw him pick up several FX forecast accuracy gongs from Bloomberg.
Drawn in by the prospect of putting strategy into practice, Mike moved from Wellington to Auckland in 2013 to join Fonterra as GM Treasury Risk Management. In this role, Mike lead Fonterra’s macroeconomic research output, and was responsible for the strategy and execution of Fonterra’s foreign exchange, debt, and interest rate hedging programmes.