For what it\u2019s worth, regardless of policies and fiscal plans, I think the next Government is going to get lucky with the economy.<\/p>\n
Two years of false starts should make us wary of getting too optimistic about all that \u201cgreen shoots\u201d stuff.<\/p>\n
Plus, there are still plenty of risks lurking in the international business headlines \u2013 oil prices, AI market bubbles.<\/p>\n
But the dairy boom just won\u2019t quit. Prices rose again at the Global Dairy Trade auction last week. For the first time, NZX milk price futures now point to a $10-plus milk price for the current season and the two after that.<\/p>\n
Bear in mind that the past two dairy seasons have already been strong ones.<\/p>\n
So if the market forecasts are correct, that would be five bumper dairy seasons in a row.<\/p>\n
Most other exports are going strong too \u2013 meat, horticulture. Tourism numbers continue to improve.<\/p>\n
I wouldn\u2019t say it\u2019s scientific, but my gut feel is you can\u2019t just keep pouring money into an economy as small as New Zealand\u2019s without some good stuff happening.<\/p>\n
At some point, some of it is going to trickle to Wellington and Auckland.<\/p>\n
But the meaningful part of the economic turnaround (jobs and inflation) is going to arrive too late to sway voters.<\/p>\n
People are going to have to decide how good they feel about the recovery story.<\/p>\n
So, what\u2019s left to convince us, collectively, whether this recovery is really taking hold?<\/p>\n
Well, quite a bit.<\/p>\n
There\u2019s a solid run of data and a big Reserve Bank rate call to come before we go to the polls on November 7.<\/p>\n
We get one more full round of mid-tier monthly data.<\/p>\n
On Wednesday, we\u2019ll see whether net migration continues to rise and whether tourism numbers are still rising.<\/p>\n
On Friday, we\u2019ll get a comprehensive read on consumer spending with Stats NZ\u2019s electronic card transaction data.<\/p>\n
That should make it clear how much pain the September fuel price surge has caused.<\/p>\n
The same day, we\u2019ll also get partial inflation data with the Selected Price Index for September. That will capture inflation for food, transport and accommodation costs ahead of the wider Consumers Price Index (CPI).<\/p>\n
Sometime in the next week or so, we\u2019re due to get the Performance of Manufacturing Index and Performance of Services Index from the BNZ and Business NZ.<\/p>\n
These surveys give us a good indication of whether the two sectors are expanding or contracting. They don\u2019t mean much to the average Kiwi, but for an indication of how the recovery is tracking at its core, economists take them very seriously.<\/p>\n
Inflation, housing and jobs<\/p>\n
We\u2019ll get the full set of CPI inflation figures for the September quarter on October 22.<\/p>\n
That one is likely to make a big headline splash.<\/p>\n
It might be a good one for the Government. Economists expect that inflation fell during the quarter.<\/p>\n
The trouble is that this will capture the big fall in fuel prices through July and August.<\/p>\n
Westpac economists updated their inflation forecasts on Friday. They see inflation landing at just 3.7% for the third quarter (down from 4.1% for the second).<\/p>\n
But they now see inflation picking up to 4.2% for the current fourth quarter.<\/p>\n
While we won\u2019t see the actual figure until the new year, that\u2019s the inflation rate voters will be feeling as they go to the polls.<\/p>\n
It\u2019s worth noting that Westpac\u2019s updated forecasts also included a downward revision for house prices this year. Where it had expected a small rise, it is now forecasting a 1.4% fall.<\/p>\n
We\u2019re due another set of property market reports from both the Real Estate Institute and Quotable Value in the next week or so.<\/p>\n
It seems unlikely there will be much in them to cheer up home-owning voters.<\/p>\n
Those with mortgages will also be watching the Official Cash Rate (OCR) decision from the Reserve Bank on October 28.<\/p>\n
As of Friday, financial markets have priced in a 60% chance that the OCR will be lifted from 2.75% to 3%.<\/p>\n
That could theoretically be a problem for the coalition so close to the election, at least in terms of the signal it sends.<\/p>\n
In reality, with most Kiwis on fixed rates, there isn\u2019t such an immediate correlation between the OCR and the back pocket.<\/p>\n
And while rising rates might not feel great, Finance Minister Nicola Willis could argue that a stronger economy is one of the underlying reasons the Reserve Bank feels the need to hike.<\/p>\n
The final big economic number we\u2019ll see before election day is unemployment.<\/p>\n
Landing with other labour market statistics (like wage growth) on November 4, it is sure to be big news.<\/p>\n
At this stage, economists don\u2019t expect much improvement from the 5.6% rate in the second quarter. In their latest forecasts, ASB economists are picking it will fall to 5.5%.<\/p>\n
My hunch is that, in aggregate, this collection of stats and releases won\u2019t be enough to reassure us that the economic recovery has really taken hold.<\/p>\n
They won\u2019t be enough to generate any material shift in the current polling trend.<\/p>\n
That means it\u2019s down to politicians on the campaign trail to sell their various visions for New Zealand.<\/p>\n
But I think the numbers are going to stay tight. We should lock in for a wild ride of post-election wheeling and dealing.<\/p>\n
Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.<\/p>\n