Forward indicators confirm that the strength of activity is likely to be different across sectors.
Declining building consents, continued weak credit growth, and a moderation in retail sales and capacity utilization rates all point to slow domestic demand, but business confidence surveys indicate optimism about the outlook in externally oriented sectors. However, citing the uncertain outlook for the period ahead, the RBNZ left the OCR unchanged at its August review. However, some two-thirds of that amount has already been committed, leaving a very tight constraint on spending for the rest of the term. The new government has launched a number of initiatives to review and revise some aspects of structural policies. There are, however, considerable downside risks to these growth projections.