Forsyth Barr senior analyst Matt Montgomerie joined Herald Now to assess whether an economic recovery is beginning to take shape in 2026. He said early market moves have been muted so far, but pointed to signs of change beneath the surface. Montgomerie noted New Zealand’s sharemarket remains highly concentrated, making overall performance sensitive to a handful of large companies, while smaller stocks led gains last year. Looking ahead, he said improving conditions for cyclical businesses, falling term deposit rates and renewed demand for yield could support sectors such as property and electricity. While the outlook remains mixed, he said there is a growing sense of cautious optimism as the economy works through its recovery phase.

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