He said there were key nuances between the regions.
Southland and Otago were flourishing lately, and Waikato and Canterbury were not too bad, but in many other places the mood was of trepidation.
Olsen told leaders of the $23.8 billion aviation sector that some key indicators around household spending were looking promising late last year.
But the Trump administration tariffs this year sent a chill through the economy, he said.
Olsen, who claimed to have notched up more than 100 domestic flights, said many people were cutting back on leisure-related aviation spending, switching to driving.
Yet he said a domestic tourism decline was afflicting much of the North Island.
A major challenge for aviation in this country and many others related to supply chain issues and parts shortages.
The crowd heard a component made in one country might attract tariffs because at some stage of its production it entered another country subject to high tariffs.
There was often not the “direct or linear connection” between tariff rates and what New Zealanders actually had to pay, he said.
“It’s very bitsy how these tariffs are playing out.”
Olsen’s address to the AIANZ conference came ahead of Thursday’s second-quarter GDP results.
Infometrics was picking a second-quarter contraction, as were ANZ, BNZ and the Reserve Bank.
Global growth forecasts were also down since late last year, Olsen said.
Consensus forecasts then of 2.5% growth had since been revised to 2.2%, he said.
That was partly due to Trump’s tariffs.
“However, we’ve also got increasingly global conflicts,” Olsen said.
“Dealing with another crisis every couple of weeks feels like a grind-down on everyone.”
He said consumers were wary of spending when food prices and utility bills weren’t showing signs of coming down.
Jobs: More people ‘disenfranchised’
He said a key concern for New Zealand was around unemployment, especially among youth.
But he also said there were more people not actually looking for jobs at the moment.
“They’re getting disenfranchised and falling out of the workforce.”
For aviation, skills shortages among pilots, engineers and others were a key concern.
And some of those concerns tied in with debates about immigration.
Olsen suggested New Zealand did not collect enough data on the skill level of people leaving the country.
According to Stats NZ, annual net outflows of New Zealand citizens hit a record high of 47,600 in the year to June 30.
That was driven by migration departures strengthening to a record 73,480.
Olsen said the country had no idea how skilled those emigrants were.
And, aligning with recent forecasts from Morningstar, he did not expect tourism numbers to reach pre-Covid peaks until 2028.
He said many major issues were beyond the control of consumers and business leaders.
But companies should keep an eye on cost pressures.
“For the aviation sector more broadly, it looks like there has been a little bit of relief.”
Olsen said fuel prices were now about 15% below a 2022 peak.
Ageing population
A recurring issue at the AIANZ conference is the need to draw young people into the industry.
Some aviation professions have an ageing population.
Multiple people have told the Herald that the huge responsibilities of transporting people safely worry some young people who might otherwise embrace a career such as aviation engineering.
“If you don’t have younger skilled people coming through, you might find yourself on a fairly short runway,” Olsen said.
“If we don’t have the skills, we literally stop moving.”
Dairy to the rescue?
Dairy and horticultural commodity prices had shown promising signs but Olsen said the country had to be mindful of what was driving that growth.
Worldwide, more people wanted dairy and other protein products but if other countries ramped up production, New Zealand would have to adjust.
But he said in a positive sign for the domestic economy, core retail spending had risen for three successive months.
Barbers praised for cutting red tape
Katherine Rich, BusinessNZ chief executive, made it clear where she stood on David Seymour’s bid to slash red tape with the sometimes-pilloried Ministry for Regulation.
She said for years or even decades, too many “bespoke, stupid rules” had hobbled growth.
“We’ve actually made New Zealand quite a difficult place to do business.”
She said barbers and hairdressers had been trying for 40 years to overturn archaic, useless rules.
Cabinet in May agreed to slash four rules about hairdressers dating back to 1980.
Those included a ban on canines other than guide dogs from being inside a barber shop, and a ban on staff serving their clients refreshments.
“Examples of absurd rules include how far apart salon seats should be, how bright the lights in the business are, whether you can have a ‘cuppa’ with your cut,” Seymour said earlier this year.
Rich said New Zealand had also missed out on lucrative medical conferences because of rules suggesting such summits would be used to “advertise” certain drugs.
Rich said the Government was trying to pursue a pro-growth agenda.
“They’re pulling almost any and every economic lever they can.”
But the economy was still sputtering.
Rich said the economic mood reminded her of the late 1980s but there were still positive signs.
And some of that was due to the instability afflicting other countries.
“New Zealand stands like an oasis. We’ve got lots of people wanting to come here.”
John Weekes is a business journalist covering aviation. He has previously covered consumer affairs, crime, politics and courts.
