Even the service sector was showing signs of expansion, albeit with low growth and off a low base, he said.
These are the reasons economists remain confident we do have a recovery underway, he said.
The trouble was, the top-line economic stats that voters feel in their pockets were still ugly.
House prices were still falling, unemployment was still high and the latest oil price spike was driving up the cost of living again.
“It’s tricky,” co-host Tamsyn Parker said.
“We’ve had an economy dependent on property markets taking off to make us feel better, immigration pouring in to boost our economy, and that’s not happening. There is this structural shift which, long term, is potentially quite good for our economy.”
Dann agreed.
“A lot of of economic thinkers will tell you that this a good rebalancing. It’s taking longer than we would’ve liked and it’s causing more pain than we would’ve liked.”
Higher oil prices this year had been unhelpful, he said.
“But the economy is sweating and working hard.”
Slowly but surely we’d see immigration and property prices rebound more sustainably, he said.
“I did notice that the net migration rate is back solidly above 20,000 a year. The long-term average is around 30,000 a year. If we creep back to that kind of level, [it will] create enough buoyancy to s help lift the property market and generate a bit more consumer demand and so on.”
Unfortunately, an economic recovery that the public could feel more acutely always seemed to be just over the horizon, and had been for the past year and a half, Dann said.
So people’s patience was wearing thin.
“I guess it could be tempting for someone to throw open the gates to immigration a bit more and get back to what we have done in the past,” Parker said.
Plenty of governments had done that, knowing that it boosts the housing market and drives consumer confidence, she said.
“To their credit, I would say this government hasn’t done that. They are focused on those underlying structural problems,” Dann said.
“I don’t think they’ve done as great a job of selling that as they needed to, obviously, based on where they are in the polls. But it has been a tough sell.
“It’s still very tough to win an election in this country with property prices off by the 20-30% that some of them are in Auckland and Wellington,” he said.
This week, Parker and Dann also look at a new NZIER report that raises issues with compulsory KiwiSaver policy plans, suggesting some poorer New Zealanders might even be worse off in the long run if forced to save money they don’t have to spare.
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.