Its economic forecast for New Zealand saw a reduction in real GDP growth in 2025 to 1.4%, down 0.5 percentage points. Growth for the Asia Pacific region – seen as strongly exposed to tariff shock – is expected to slow to around 3.9% and 4% in 2025 and 2026, respectively, down from 4.6% in 2024 and 4.4% in 2025, the IMF said.
The uncertainty made forecasting difficult during the most recent reporting season, although company outlook statements did come in positive overall, according to Forsyth Barr’s quantitative scorecard of the results.
“Trump tariffs and a major capital raise clouded the December earnings season, making it feel worse than it actually was,” Forsyth Barr analysts Aaron Ibbotson and Matthew Leach said in their research note.
“Our overall scorecard yielded a net negative result, but only modestly so. Cost-out programmes, demand as weak as expected and a surprising net positive outlook are our main takeaways.
“Earnings are still being downgraded as the recovery is pushed out at least another six months, but the pace of downgrades has slowed meaningfully,” they said.
The February 2025 reporting season, dominated by the property and aged care sectors, showed earnings per share (EPS) growth was below expectations – weighed down by the likes of Fletcher Building and Meridian Energy reporting large losses compared with the previous corresponding period.
Overall revenue growth was slightly better than expected though.
Of the 31 NZX-listed companies that reported results, 11 reported ahead of Forsyth Barr’s EPS expectations, four were in line and 16 were below.
“Downgrades continue to feature with net negative revisions across the board from revenue to the bottom line for both FY26 and FY27,” the analysts noted.
The bright spot was the a2 Milk Company, which increased its first-half net profit by 7.6% to $91.7 million and recorded an 18.8% post result one-day share price gain.
The biggest miss came from Spark NZ, which reported a 78% decrease in first-half net profit and a 17.8% post-result one-day share price decline.
Forsyth Barr noted that both companies have a limited read across the New Zealand economy, whereas Fletcher was more hitched.
“We upgraded our estimates for cyclical bellwether Fletcher Building for the first time in over two years. It felt bleak but was in line with our low expectations.”
One company result to look out for later this month is Mainfreight, a major logistics and transport company that is also seen as an economic bellwether.
The company reports its first-half results on May 29.
Earlier this month, Mainfreight said it expected its profit before tax and sales revenues for the March 2025 year to be above market consensus expectations of $375m and $5.1 billion, respectively.
“However, we are seeing a reduction in forward sea freight bookings for May on the Transpacific trade route, China to US,” the company noted.
The stock staged a decent recovery in the aftermath of the update. Geoff Zame of Craigs Investment Partners said in a daily newsletter that Mainfreight’s update calmed market concerns about a tariff-induced slowdown in global growth impacting that company’s earnings.
At the macro level, uncertainty around tariffs remains a theme, Milford Asset Management portfolio manager Mark Riggall said in a recent note to clients.
“Just three short months ago, investor expectations were of ongoing US outperformance, both economically and from the stock market. Now, expectations are rapidly changing as fading US growth, policy headwinds (partly from tariffs), AI [artificial intelligence] fatigue and stronger stimulus impulses overseas (notably the German fiscal package) have upended the outlook for various asset markets.
“Looking ahead, uncertainty around tariffs and other government policy in the US lowers our conviction levels. But a policy-induced slowdown can also be mitigated by a policy reversal, an outcome that is likely at some point in the future.”
Duncan Bridgeman is managing editor of NZME Business, including the Business Herald and BusinessDesk.
