Economic growth will slow, interest rates and wages will rise, unemployment will ease, and the pace of growth in housing construction will tail off – but exports are forecast to grow supported by a weaker Kiwi dollar.
Good news for transport and equipment suppliers is the upward forecast for economic growth in 2015-17.
However, the nine economists surveyed by the New Zealand Institute of Economic Research (NZIER) have all cut their forecasts of economic growth in the current year, reports the NZ Herald.
The consensus amongst the forecasters polled by NZIER is that the cycle has peaked and that annual average growth will come in at 3.3% for the year ended March 2015 which is down from a consensus forecast of 3.8% ninety days ago.
Growth expectations have been revised slightly up to 2.9% for the year to March 2016 from 2.8% in June, and to 2.2% to March 2017 from the figure of 2.1% forecast three months ago.
Forecasters now expect Statistics New Zealand to report this week that GDP grew by 06% in the June quarter rather than the 0.9% they forecast in the previous quarterly survey.
Growth in residential housing construction is expected to moderate from 15% this year to zero in three years time.
The survey experts say that exports are forecast to grow at about 3% a year for the next four years, supported by a fall in the exchange rate making exporters more competitive.
According to the experts surveyed, interest rates are expected to rise again from early next year and continue gradually to 2018, the average forecast being by 1.3 percentage points.
This would raise floating mortgage rates from about 6.75% to 8%.
However, wages are expected to grow 3.3% a year over the next three years outpacing the cost of living by 1.3% a year.
The unemployment rate is forecast to ease from 5.6% to 5% by 2017.
