Even the service sector was showing signs of expansion, albeit with low growth and off a low base, he said.<\/p>\n
These are the reasons economists remain confident we do have a recovery underway, he said.<\/p>\n
The trouble was, the top-line economic stats that voters feel in their pockets were still ugly.<\/p>\n
House prices were still falling, unemployment was still high and the latest oil price spike was driving up the cost of living again.<\/p>\n
\u201cIt\u2019s tricky,\u201d co-host Tamsyn Parker said.<\/p>\n
\u201cWe\u2019ve had an economy dependent on property markets taking off to make us feel better, immigration pouring in to boost our economy, and that\u2019s not happening. There is this structural shift which, long term, is potentially quite good for our economy.\u201d<\/p>\n
Dann agreed.<\/p>\n
\u201cA lot of of economic thinkers will tell you that this a good rebalancing. It\u2019s taking longer than we would\u2019ve liked and it\u2019s causing more pain than we would\u2019ve liked.\u201d<\/p>\n
Higher oil prices this year had been unhelpful, he said.<\/p>\n
\u201cBut the economy is sweating and working hard.\u201d<\/p>\n
Slowly but surely we\u2019d see immigration and property prices rebound more sustainably, he said.<\/p>\n
\u201cI 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.\u201d<\/p>\n
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.<\/p>\n
So people\u2019s patience was wearing thin.<\/p>\n
\u201cI 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,\u201d Parker said.<\/p>\n
Plenty of governments had done that, knowing that it boosts the housing market and drives consumer confidence, she said.<\/p>\n
\u201cTo their credit, I would say this government hasn\u2019t done that. They are focused on those underlying structural problems,\u201d Dann said.<\/p>\n
\u201cI don\u2019t think they\u2019ve 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.<\/p>\n
\u201cIt\u2019s 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,\u201d he said.<\/p>\n
This week, Parker and Dann also look at a new NZIER report<\/a> 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\u2019t have to spare.<\/p>\n Listen to the full episode<\/a> for the complete conversation.<\/p>\n