Monday’s Pro email: Housing market warming up again
In the political economy, the Government is heading into the last Parliamentary sitting week of the year with a slightly warming economy at its back and an election year of politicking and spending announcements ahead of it.
There are some positive signs emerging from the economy, both at home and overseas.
A landslide win for Boris Johnson's 'Get Brexit Done' slogan in the British election on Saturday morning has restored some element of certainty to the Brexit situation in Europe. China suspended a tariff hike on US imports on Saturday and US officials said yesterday a fresh trade deal was done and dusted, except for the translations.
The British pound surged and the Kiwi dollar rose against the US dollar on Friday, in part as global investors were more confident about the future and returned with an appetite for riskier currencies such as ours.
Closer to home, Real Estate Institute figures released on Friday showed the housing market warming up through November, even in Auckland. Manufacturing sector figures released on Friday released via BusinessNZ/BNZ's PMI survey showed expansion in November, albeit at a slightly slower rate than October.
GDP figures due on Thursday are also expected to show growth in the December quarter running at an annual rate of over two percent, which was better than many were expecting in the winter. For now, the economy here and overseas has responded well to monetary policy easings and some news of Government investment.
Labour and New Zealand First also have control of the levers of Government for investment news announcements. Transport Minister Phil Twyford and Deputy Prime Minister Winston Peters announced on Friday the release of the Draft Rail Plan, which they said was linked to the introduction of the new The Land Transport (Rail) Legislation Bill in Parliament this week that would allow rail to be funded from the National Land Transport Fund and introduce track user charges. National is set to release its transport discussion document later today, which is expected to push for a move away from fuel taxes to road user charges, and for more road spending.
Also, Agriculture Minister Damien O'Connor and Fisheries Minister Stuart Nash released the Situation and Outlook report for the Primary Industries showing an expected rise in exports of over five percent over the next two years to almost $50 billion. Commerce Minister Kris Faafoi also announced this morning that the Government would allow early access to spectrum for 5G network development.
However, there are still big decisions to be made, potentially as early as this last cabinet meeting of the year later today. They include a potential combination of RNZ and TVNZ. Prime Minister Jacinda Ardern is expected to summarise her year and report back on that meeting after 4pm.
In business and investing news, Xero's chair stepped down for family reasons, Comvita appointed a new CEO and Z Energy's shares hit a five year low after it warned of lower profits because it could not force through petrol price increases.
In news overseas overnight, the COP25 Climate Change talks in Madrid ended with a compromise deal that would see countries come up with improved carbon reduction plans at a conference in Glasgow next year, but they could not agree on more urgent action recommended by scientists or on a carbon tax plan.