Over the past few months we’ve talked about the uneven shape of the NZ economic recovery Canterbury and the Waikato showing early signs of green shoots, while Auckland and Wellington have struggled to find momentum.
That picture hasn’t really changed. Travelling through the main centres, it’s clear there’s still plenty of spare capacity, and confidence among households and businesses remains
subdued. The lift many expected by now just hasn’t arrived.
By contrast, the regions continue to stand out. Export-driven industries are delivering strong results, whether through busy ports or primary producers finding international demand.
Recently the dairy sector has been in the spotlight. A2 Milk has shared an impressive story of growth and reinvestment, with plans to expand operations in Pokeno, strengthen ties with Fonterra, and reshape assets in Southland – moves that could release significant new capital into the sector.
Adding to the momentum,
Fonterra announced the sale of its consumer business to French company Lactalis, ending speculation about a possible NZX listing and paving the way for a $3.2 billion pre-Christmas payout to farmers. Taken together, these developments underscore just how central dairy remains to New Zealand’s economic story.
Meanwhile, markets are sending mixed signals. Some company results and activity in key sectors point to resilience, suggesting parts of the economy are still ticking over. At the same time, the softer New Zealand dollar and the prospect of further rate cuts highlight just how cautious the broader outlook remains.
It’s a picture of resilience in pockets, tempered by caution at the centre. The real question now is how long we have to wait before the strength seen in the regions begins to translate into a broader, more sustained lift across the economy.
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Article provided by Harbour Asset Management
