New Zealand Economy Presses on Despite Minor Setbacks
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
New Zealand’s construction boom is a primary factor that is keeping the country out of economic recession. New Zealand has outpaced all other Organization for Economic Cooperation and Development (OECD) economies, and the nation has been the fastest growing OECD economy within the past year. The economy has grown at an annual 3.5 percent, and economists predict steady growth for the future.
New Zealand’s construction boom is a primary factor that is keeping the country out of economic recession. New Zealand has outpaced all other Organization for Economic Cooperation and Development (OECD) economies, and the nation has been the fastest growing OECD economy within the past year. The economy has grown at an annual 3.5 percent, and economists predict steady growth for the future.
Many analysts have labeled New Zealand as a ‘rock star’ economy, but others predict the nation will soon go into a period of steady but consistent growth. The country stands out as one of the few economies around the world undergoing drastic economic turmoil, and there are a number of factors at play. New Zealand’s construction sector is contributing to the nation’s employment rate of 3.5 percent annual growth.
The high employment numbers increased income, uplifting consumer confidence and allowing more people to contribute to the economy. In addition, a strong economy gives exporters the necessary confidence to conduct business. New Zealand officials have been concerned about the New Zealand dollar’s high-value impact on exporters, but strong economic growth is fueling the export business thus far. New Zealand exports such products as cheese, wine and oil.
New Zealand’s Recipe for Success
New Zealand’s economy should serve as a model for the rest of the world, but, what works for New Zealanders, may not necessarily work in other countries. New Zealand’s construction boom has more to do with the revamping of Christchurch, which is the nation’s biggest city in the South Island of New Zealand. In addition, the country is undergoing a growing population and a vast uptick in migration. Chinese officials have been trying to replicate this stimulus model in their own construction sector, but a combination of sluggish growth and low demand has slowed down infrastructure projects. Nevertheless, the New Zealand economy ties to the rest of the world, and part of the nation’s economic success depends on the output of other nations.
Signs of Wear Showing
A slowdown in Chinese demand can negatively affect New Zealand’s economy, leading New Zealand Prime Minister John Key to say that China’s economic stagnation is a primary concern. Further, there is Australia, which is New Zealand’s largest trading partner. Australia has reached its mining boom peak, including a decline in investment, and the country’s economy remains lukewarm at best. Another problem for New Zealand is low dairy prices, but government officials have stated they intend to invest in science and research to support the industry, and dairy production has increased. But despite the minor hiccups, the country will continue to do well through a valuable currency, stable domestic economy and high exports.
