“We’ve reached a turning point,” says Bridgeman, who doesn’t believe the latest concerns about fuel prices will be enough to derail things this time.
Despite the obvious headwinds, the economy was starting to see growth underpinned by “genuine business activity”, he said.
Bridgeman highlighted positive signs in New Zealand markets as reasons for optimism.
“One piece of really good news this week was the announcement that Lodestone Energy is going to do an IPO [initial public offering] and list on the NZX,” he said.
“This is the first company in about five years.”
The solar power company wants to raise up to $100 million and will issue up to 206.66 million shares, giving it a potential market capitalisation of $465m.
This was a big vote of confidence in the NZX, Liam Dann said.
Often in the past decade, good companies had looked straight to the ASX or Nasdaq, or stuck with private capital raising, he said.
“That’s right,” Bridgeman said.
“Where you have one new company announcing a listing, sometimes it starts a chain reaction and you may see some other firms that were thinking about it, then the downstream effects of that could be really significant.
“We saw that in the mid 2010s when we had a real wave of listings. Then that gives people a sense that things are actually starting to look good. ”
Fonterra’s bumper result was another big boost for the country, Bridgeman said.
Fonterra delivered a full-year profit of $2.6 billion last week and a full-year operating profit of $3.4b – including the $1.2b from the sale of its Mainland brands to French dairy giant Lactalis.
That was probably the largest corporate profit in New Zealand history, Dann said.
It surpasses ANZ New Zealand’s $2.532b statutory profit for the year to September 2025.
“It’s not such a corporate result. It’s like a big stimulus package to the rural community,” Bridgeman said.
The staggering figure was that Fonterra’s cash return to farmers would top $20b this year when the payout, dividend and return from the brands sale were tallied, he said.
Fonterra has also announced plans to invest more than $1b in new production facilities in the South Island.
The big question now was how long it would take for cash injected into the rural economy to circulate through to cities like Auckland and Wellington.
“I feel like if you keep pouring money into New Zealand, it’ll reach Auckland or Wellington at some point,” Dann said.
Farmers were conservative by nature, and a large portion of the returns would go on debt repayment or maintenance, Bridgeman said.
“But sooner or later it’s the new ute, the new tractor, some spending.”
This week on the podcast, Bridgeman and Dann also examine a new report by CMC Markets, which looks at the long-term productivity challenge facing New Zealand’s economy.
It includes perspectives from David Kirk, Bill English and Simon Bridges.
Former All Blacks captain, business leader and current NZ Rugby Chairman David Kirk. Photo / Andrew Cornaga, Photosport
“Ultimately there are three things that drive productivity,” Kirk says in the report.
“The first is capital. We need access to investment, and we need that capital at the lowest possible cost. That comes from stable government, sensible economic policy and creating confidence for long-term investors.”
“The second is people. We need an education system that produces adaptable, capable people who can keep evolving as technology changes the nature of work.”
“The third is ideas,” Kirk said.
“Some ideas create entirely new industries, but most productivity comes from thousands of businesses continuously finding better ways to do what they already do. That’s where New Zealand’s biggest opportunity lies.”
Listen to the full episode for the complete conversation.
The Economy of Everything is available on the iHeart app or wherever you get your podcasts.
The series is hosted by Liam Dann, business editor-at-large and Tamsyn Parker, business editor for the NZ Herald. Thanks to CMC Markets.