There's been enough "Chicken Little" talk about the New Zealand economy and Kiwi businesses need to cheer up, ASB chief economist Nick Tuffley says.
The bank, in releasing its latest economic forecasts, has pleaded for firms to be less downbeat after business confidence slumped to levels not seen since the global financial crisis.
"If ever there was a time to 'fake it until you make it' and 'stop worrying and be happy' — it's now, or soon business will have the whole country listening to 'the blues' as a result of holding back investment and talking ourselves into an economic slowdown," Tuffley said.
While New Zealand's economic expansion has slowed — with gross domestic product growth slipping to 2.7 per cent in the year to March — ASB expects it to pick up speed and be above 3 per cent again heading into 2019.
The bank is predicting real gross domestic product growth of 2.9 per cent in the 2018 calendar year. It tips that growth to hit 3.3 per cent across much of 2019.
This is more optimistic than other forecasts. Westpac, for instance, expects real GDP growth of 2.7 per cent this year and 3.0 per cent next year.
There are risks on the horizon, Tuffley says, including the trade war between China and the US.
But he said that export prices (with terms of trade near record highs) and a surge in house building is offering New Zealand some protection.
Close to 33,000 new dwellings got building consent in the year to June, up 7.9 per cent on the prior 12 months.
"Near-term growth in construction will offset declines in other forms of business investment such as plant and machinery, and we still expect strong GDP growth over the rest of 2018, giving us something to smile about," Tuffley said.
Looking at some of the listed companies that reported their financial results this month, Craigs Investment Partners' Mark Lister said you'd be "hard pressed to deduct we're on the cusp of a major economic slump".
"Some of the highlights include consistent performers Auckland Airport, Ebos, Meridian Energy and Port of Tauranga. These are genuine blue chip companies, and true to form they all posted record profits and increasing dividends," Lister said.
Trade Me was a standout, he said, the a2 Milk Company "silenced critics" and Skellerup was "the pick of the bunch" along the smaller end of the NZX.
Fisher & Paykel Healthcare also revealed a "healthy profit upgrade" at its annual meeting last Thursday, he said.
The high-tech manufacturer, which doesn't post results during this reporting season, raised its full-year earnings forecasts by about $5 million to $215m. "It was almost entirely due to a weaker NZ dollar, but we'll take it nonetheless," Lister said.
Although some companies are yet to report — with Chorus, Metlifecare, Tourism Holdings, Genesis Energy, Scales and Vista Group due to reveal all this week — Lister said it had been a "fairly impressive showing so far".
"There's no shortage of worries to cloud the outlook, but the numbers point to an economy that's probably in better shape than some might believe."