Any early optimism in the business sector for 2024 has been delivered another blow as it has been officially announced that New Zealand is in recession. The Gross Domestic Product (GDP) fell 0.1 per cent in the December 2023 quarter following a previous fall in the September quarter. A further concerning statistic for businesses, which probably only served to confirm what they already knew, is that national disposable income also fell meaning that more and more people have less to spend on non-essential items.
Our annual inflation rate is thankfully coming down but at 4.7 per cent, it is still higher than Australia, the UK and the US whose levels are 4.1, 4 and 3 per cent respectively. I have previously noted that the RBNZ remains committed to reducing inflation to its target of 1–3 percent and whilst a return to this target band is expected late this year, the 2 per cent mid-point is unlikely to be reached until late 2025.
This signals that there is still a long and challenging road ahead for businesses many of whom have spent the last few years struggling to survive during and following the pandemic and in the face of ongoing financial pressure due to rent increases, high interest rates and a further reduction in income as customers feel the pinch of the cost-of living crisis.
In closing, I would ask you to please continue to support your local business community by shopping locally whenever you can.
Kevin O’Leary
General Manager, Business North Harbour
SOURCE: Networker Magazine
