New Zealand's economy was on a roll in the last few months of 2019, with new job data showing unemployment fell to four per cent and wages grew at the fastest rate in more than a decade.
Under normal circumstances, the strong data suggests we'd have reached the end of the cycle for Reserve Bank interest rate cuts.
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But in the shadow of the coronavirus outbreak and a near certain slump for the Chinese economy, the outlook is highly uncertain.
A new report by Westpac economists estimates the coronavirus effect will shave 0.6 per cent off GDP this quarter.
This assumes a two-month ban on travel and one month of disruption in China's factories - and this effectively a best-case scenario.
On that basis Westpac sees our March quarter GDP down from a previous forecast of 0.7 per cent to just 0.1 per cent.
However, on the upside, Westpac expects little lasting damage to GDP across the full year.
"Late-2020 would feature high quarterly GDP growth as the economy rebounds," Westpac chief economist Dominick Stephens said.
Finance Minister Grant Robertson said the wage data showed the economy in "good shape" to withstand any global downturn.
"The Treasury is currently assessing the potential impacts of the coronavirus outbreak," he said. "But we know we're in good shape to withstand global headwinds."
Wage growth (on the Labour Cost Index) came in at 2.6 per cent for the year to December - that was the largest increase since the year June 2009, when it increased by 2.8 per cent.
The quarterly employment survey for the year to December showed average ordinary time hourly earnings increased to $32.76, up 3.6 per cent.
Public sector average ordinary time hourly earnings increased to $41.34 (up 4.6 per cent), while private sector average ordinary hourly earnings increased to $30.56 (up 3 per cent).
The key drivers were healthcare and social assistance (up 4.9 per cent), public administration and safety (up 5.3 per cent) and the retail trade (up 4.2 per cent).
The strength of the data was slightly ahead of most forecasts and suggests the economy is now running close to capacity.
The employment data provided confirmation that the Reserve Bank was "nailing its maximum sustainable employment objective," said ASB economist Mike Jones.
"Core inflation is also around target. If it hadn't been for the outbreak of the coronavirus, we suspect the Bank would be soon moving to a more neutral policy bias. But, with the virus impacts still evolving and unclear, we think the RBNZ will keep its powder dry at next week's meeting."
The Reserve Bank makes its first rate call for the year along with delivering a full monetary policy statement next Wednesday (February 12).
It is widely expected to leave rates on hold and take a wait-and-see approach to the economic impact of coronavirus.
The RBNZ "will acknowledge the human impact of the tragic new coronavirus, with cautious language about possible risks to the economic outlook", said ANZ chief economist Sharon Zollner.
"Domestic conditions give the RBNZ scope to wait and see how developments unfold," she said.
"A short-term negative impact on GDP growth, commodity prices and global wholesale interest rates may feature in the central forecast. Exactly how they incorporate it won't matter too much – any forecast will be out of date in a week."