NZ: Output growth likely rebounded in Q1 – RBC CM

New Zealand’s output growth likely rebounded in Q1 (RBC: 0.7%q/q, 2.7%y/y) after activity in Q4 was dampened by a large earthquake mid-quarter suggests the analysis team a RBC Capital Markets.

Key Quotes

“Household consumption remains solid, whilst the pipeline of both residential and non-residential investment remains large enough to suggest ongoing contributions to growth. Offsetting this is external trade, with a large fall in dairy export volumes and a modest rise in total imports likely to weigh on growth in the quarter.’

“Looking ahead, timely indicators suggest ongoing growth of near 3%, though with potential output running near 2.5% given migration flows, we do not expect this to result in any meaningful pick-up in inflationary pressures.”