New Zealand Q3 GDP data, published overnight on Thursday, are expected to be weak. We forecast that GDP actually fell in q/q terms while the consensus anticipates only 0.1% q/q growth, after an already-soft expansion pace of 0.2% in Q2. Nevertheless, the upswing is not in serious trouble. Construction work following the earthquake will provide some lift from Q4 while manufacturing and investment look well-placed to expand at a more rapid pace in coming quarters too. That said, households will continue to rebuild their balance-sheets and pay-off debt. The upshot is that New Zealand’s upswing in 2011-12 will be more subdued than is usual.
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