8 Jan 2014

Economic boost predicted for 2014

9:01 am on 8 January 2014

After a bumpy ride out of recession, economists are predicting a rosy year for New Zealand, with one going as far as calling the country the "rock star" economy of 2014.

Paul Bloxham, chief economist for Australia and New Zealand at the global bank HSBC, said booming dairy prices, the Canterbury rebuild and the housing market will all boost growth.

"We think New Zealand will be the rock star economy in 2014, especially when you compare it to other developed world economies. We think that New Zealand will outperform the bulk of the other developed economies."

Mr Bloxham said the main risk is the persistently strong New Zealand dollar, which could hurt exporters.

ASB chief economist Nick Tuffley said the stronger economic outlook should mean better job security for workers and a slight increase in wages.

And an ANZ bank survey of small businesses released on Wednesday put confidence at record levels, particularly in Auckland and the South Island.

However Council of Trade Unions chief economist Bill Rosenberg said growth predicted for this year may not translate into better employment and wage figures.

"New Zealand looks like it's going to be one of the strongest growing economies in the OECD - it's currently about number five - but it's about number twelve or thirteen in terms of unemployment. This jobless growth scenario is really not doing a great deal for people who are trying to earn greater incomes and get more money into their household."