The Reserve Bank's forecast from its November monetary policy statement forecast 0.3 percent growth in the final quarter. Photo: RNZ
Hopes for economic growth in the final three months of 2024 may be fading amid an underperforming economy.
Two key measures - the BNZ-Business New Zealand Performance of Manufacturing Index (PMI), and the Performance of Services Index (PSI) - painted a bleak economic picture.
The PMI remained in contraction for the 22nd consecutive month, while the PSI was in contraction for the 10th straight month.
The combined PMI and PSI measure also contracted further, and has been going backwards for 10 months - not good news for the economy.
BNZ senior economist Doug Steel said the combined measure highlighted downside risks to their December quarter forecast of 0.2 percent positive growth in gross domestic product (GDP) - a broad measure of economic growth.
The Reserve Bank's forecast from its November monetary policy statement forecast 0.3 percent growth in the final quarter.
But Steel said the PMI and PSI data showed activity "struggled to grow".
"These indicators put some downside risks on our estimates for Q4 GDP and that would suggest that it rounds out a year that has been pretty woeful when you look at the likes of reduction in GDP through the second and third quarters," Steel said.
The most recent Stats NZ data showed GDP contracting 1 percent in the September quarter and 1.1 percent in the June quarter - meaning the country was in deep recession.
Steel said if there was going to be any economic growth in 2025, it would be coming from "a weak base".
"There are some other signs that it (GDP) may have edged forward, but these indicators (PMI & PSI) suggest - whether it's a small minus or small positive - it hasn't been flash," he said.
"While some indicators [such as] business confidence are suggesting a turnaround, others like the [combined PMI and PSI] suggest that it could take some time for it to feel like a recovery."
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