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Booster Roll-out Update

Boosters and the newly available children’s COVID-19 vaccine have led to a surge in vaccination dose rates in the last week.  New data showed that in just six weeks since the beginning of December, nearly 22% of people aged 18 or over have already had a booster.

By the end of February, more than 82% of vaccinated New Zealanders will be eligible to get their booster dose.  Meanwhile, children aged 5-11 are eligible to get their first dose of the pediatric Pfizer vaccine from Monday this week.

Q4 Business Outlook and Demands Weakens

Business confidence and demand dropped in the fourth quarter of last year, with a net 28% of firms surveyed expecting general business conditions to deteriorate compared with 11% pessimism in the previous quarter, according to the New Zealand Institute of Economic Research’s quarterly survey of business opinion.

Inflation pressures are accelerating, and labour shortages due to pandemic restrictions are underpinning a lift in wage growth.  This increase leads to higher costs for businesses, with a net 61% reporting higher costs in Q4– the highest level since June 2008.

Home Prices Drop in December

House prices dropped 0.3% in December over the previous month and rose 22% year-on-year, according to the Real Estate Institute of New Zealand.  The impact of rising interest rates, tighter lending criteria, and changes to investor taxation restrictions are the reasons for this change in dynamics.

Construction Declines, But Residential Expected to Drive Growth

The economy recorded its second-largest quarterly contraction since current records began in Q3 2021 due to the limits in economic activity as a result of the Alert Level 4 lockdown.

The restrictions also weighed heavily on construction activity, with the value-add of the construction sector declining to $4.2 billion in the quarter– a contraction of 9.6% quarter-on-quarter and 11% year-on-year.

However, growth is expected to be driven by the volume of residential building.  Between January and October 2021, consents were up 26.1% year-on-year.

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