The Economy is melting down because of this Government, not despite it

I don’t think we appreciate that for parts of the economy, we have serious and rising pain…

‘Economy hits a brick wall’ as services sector continues to decline – economist

The services sector continues to decline with all indicators consistent with an economy in recession.

BusinessNZ Performance of Services Index (PSI) for May was down 4.1 points to 44, which was well below the long-term average of 53.

Anything below 50 points indicated contraction.

“There are clear warnings that the New Zealand economy has hit a brick wall in Q2 [second quarter], and this is despite the substantial revenue growth flowing from the agriculture sector,” BNZ senior economist Doug Steel said.

“If there was ever an argument for the provision of further stimulus from the central bank, then this is it.”

BusinessNZ’s chief executive Katherine Rich said the services sector had been contracting for several months, apart from a small expansion in January.

All key indicators for May were in contraction with negative comments from two-thirds of respondents.

“Many businesses noted reduced demand and falling revenues due to rising costs, economic uncertainty and low consumer confidence she said.

“Comments noted customers spending less, delaying decisions, and responding cautiously to inflation interest rates, and broader market instability.”

Steel said the fall in the PSI followed the sharp decline in the Performance of Manufacturing Index (PMI), which fell to 47.5 in May from 53.3 in April.

“Together, they are consistent with the economy returning to recession. We’re a long way from forecasting this, but the data are a reminder of just how vulnerable the economy currently is.”

He said the combined services and manufacturing data looked nothing short of disastrous.

…nothing short of disastrous.

Combine this with the exodus fleeing this Government’s failed policies to Australia and we have a problem.

Look at the Numbers…

…things are not getting better…

Kiwibank economists: More Official Cash Rate cuts needed amid slow recovery, global risks

Kiwibank economists are calling for more cuts to the Official Cash Rate as the economy continues to crawl out of a “deep, deep hole”, and as trade tensions and slowing demand offshore hit “just as confidence begins to lift”.

The truth is, that thanks to National and their slash and burn policy, we are in worse shape than when Labour were spending to protect us from Covid.

The recently announced $13.5million for tourism was just desperate mad dash advertising using false 100% Pure greenwashing because the exodus of skilled workers to Australia (thanks to National killing off all public housing and infrastructure work pipelines) is tanking the economy far worse than we should and this Government will throw money at any get rich quick scheme.

Labour is good for capitalism.

National is good for the capitalists.

NZ’s economy is not underperforming by accident

 

The truth is NZ is two massive sparsely populated Islands and because of the lack of population density, the dynamics of competition that make free market capitalism work well in some places don’t work here!

The State has always had to be the foundational stone in anything and everything we do.

They are the base 30% when we require 40%.

Nicola Willis is a wide eyed NZ Initiative Free Market Acolyte, she believes as a matter of faith that when you cut out the State, the market steps in and does it cheaper. People complain these terrible budget cuts offer no actual economic plan, what they miss is that Willis is such a free market devotee, the steep cut backs ARE  the economic plan!

For a fourth month in a row the Business Confidence has dropped because they are realising that National isn’t ruling for the economy, they are ruling for their donors interests and those are 2 very different things.

 

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