New Zealand’s economy is showing tentative signs of recovery, but is the momentum strong enough to last? In this episode of Bridge talks Business, Investment Analyst Jeremy Hutton talks to Ryan Bridge about the latest macroeconomic data, signs of life in retail spending, and what rising fuel costs and global interest rates could mean for households and businesses. He looks at the upcoming election and its potential market implications, why retirement village stocks have taken another hit, and whether the electricity sector has anything to worry about. With pockets of resilience emerging across the NZX, he discusses whether the recovery is finally gaining traction or fresh headwinds are about to slow things down.
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Bridge talks Business: 13 October 2026
Episode Transcript
Ryan Bridge
Kia ora and welcome to episode 97 of Bridge talks Business with Milford. She’s not rip roaring but the economy is definitely showing good signs, the data stronger than expected. This week I’m sitting down with Jeremy Hutton from Milford for an update on the state of the economy ahead of the election next month. The good news? Card spending is holding up just okay.
First, here’s your top five business bits from the last seven days.
- The French are under pressure. Markets are worried about their debt and lack of a credible plan to turn it around. An agreement on one to get it down, looking elusive. Presidential candidate Marine Le Pen tried to outline a plan to get the deficit back in shape by 2030, but markets looked through this, given the difficulty they have in achieving it.
- In the US, resilience from the ISM services data, that measures the health of the non-manufacturing sector there, about 80% of their economy. A wee bit of softening in new orders, but overall still an expansion.
- The Fed minutes, less hawkish than expected. While the decision to hike the rate last month was unanimous, there were mixed views on policy going forward. This makes upcoming data even more important in the US.
- There were a number of US Treasury auctions last week, which went surprisingly well. For all the fears around rates, the auctions were taken down reasonably well. The Treasury continued to help with their buybacks.
- This week the major focus is on US CPI, that’s inflation. Markets closely watching this data, particularly given the October Fed pricing was coming off a bit, now implies a very low chance of another hike.
Alright, it is time for our feature interview because the election is very close. It’s very soon and the result very, very close, according to the polls. Will we know by Christmas who is the next government? That’s the question. And how are markets reacting to this? What is the New Zealand economy looking like going into November 7? Here to discuss on the podcast is Jeremy Hutton, an Investment Analyst at Milford. Just a reminder, this segment is informational only and should not be considered financial advice. Jeremy, welcome back.
Jeremy Hutton
Thanks, Ryan. Good to be here.
Ryan Bridge
Great to see you. Let’s do a sit-rep of the economy. We’re heading into an election. She’s not rip roaring, but things are looking pretty good.
Jeremy Hutton
Yeah, I think that’d be a good summary. Like they’re trending in the right direction. Things are getting a little bit more positive, but I wouldn’t say we’re shooting the lights out. So a few things that are going positive, like the labour market’s getting slightly better. We’re having more filled jobs in the economy. Total hours worked is improving. Migration trending slightly the same way, so a little bit more stimulus there. That’s mainly less Kiwis leaving, which is a positive. The GDP growth numbers in the second quarter are a slight beat better than what people were expecting. No doubt we’ve got a few headwinds in Q3 coming as well. But yeah, there’s still some challenges out there, right? You’ve got fuel costs impinging, inflation’s still high, interest rates, unfortunately, are going in the wrong direction. That won’t be good for the housing market, which is important for Auckland. But yeah, so trending in the right direction, but it is a tough grind out there.
Ryan Bridge
Yeah, because the interest rates is a global thing, but happening here as well, starting to tick up. As you say, we’ve got oil, and yet we have these growth forecasts coming of 2.5% a year. Tough to reach?
Jeremy Hutton
Potentially, it’s gonna be a challenge, right? But I think there’s a little bit of momentum there. They’ll take some positivity from that. I mean, you talked about the election as well, coming into late this year. That could provide a little bit of a headwind as well, just take some of that momentum out. So maybe unfortunate timing for the election.
Ryan Bridge
Card spending’s the other big one, because when people aren’t confident, they don’t spend. When people don’t spend, we don’t have an economy that’s cranking. But card spending is coming up?
Jeremy Hutton
Yeah, it’s been remarkably resilient in the face of the fuel and gas price increases that we’ve seen. I mean, discretionary spending is still no doubt very tight. Hospitality, retail, it’s all had a very tough period, but it is getting incrementally better. So perhaps post the election, if the Iran situation gets sorted, that whole sector might get a bit of clear air.
Ryan Bridge
What about some of the companies that have been reporting? Kathmandu, for example, a little bellwether of how things are going out there.
Jeremy Hutton
Yeah, I mean, we’ve had some of the New Zealand retailers report over the last month, and they had some interesting anecdotes, interesting comments that again, you can take some positivity away from. So yeah, Kathmandu is an example, the outdoor brand. Their New Zealand sales are improving versus the previous year, and they even called out that their New Zealand numbers were going better than Australian numbers, which is an interesting turnaround from what we’ve seen over the past few years. The Warehouse, that business back into profit again, so that’s positive for a New Zealand icon. And then I suppose finally the call out being the star of the show is Hallensteins Glassons. I mean, that stock’s been on a tear this year, it’s up 47% so far in 2026, second highest on the NZX. So yeah, there are a few jewels there if you look hard enough, but I think again, trending in the right direction in that discretionary retail space.
Ryan Bridge
And same with the Hallensteins Glassons, really interesting to see the breakdown between New Zealand and Australia, because for so long it was like New Zealand, basically going nowhere, but clearly there’s movement there as well.
Jeremy Hutton
Yeah, I mean, no doubt New Zealand’s had a very tough time. You’ve had inflation, higher interest rates, very weak consumer environment. Australia, the lucky country, seems to have navigated that slightly better over the past period, but I think Australia’s going through a few of their own headwinds now. Their housing market’s coming off pretty rapidly, they’ve got more interest rate increases going to be coming through there, they’ve got a bit more of an inflation problem. So yeah, it’d be interesting to see that dynamic, that split between the two economies. And again, for migration, we’ve had a lot of Kiwis leaving to Australia, does that start to turn around a little and provide a little bit more stimulus for the New Zealand economy?
Ryan Bridge
Jeremy, we’ve been talking a lot and looking a lot at retirement, and some of the earnings – the reporting from the retirement sector – has been a bit weak. We’ve also got – you mentioned the election – some parties coming and hammering with a bit of regulation or changes to regulation, how’s that looking?
Jeremy Hutton
Yeah, I mean, the retirement sector, no doubt has been pretty dire again in 2026. I mean, the three big listed operators, their share prices are down anywhere between 30% and 45% so far this year. And weak housing market, not helpful, you’ve had high interest rates not helping with their big debt balances, but then the third limb that’s been impacting more recently has been the political focus and going into the election, there’s been quite a lot of policy that’s come out, and in particular from the Labour Party. And given the polls are pretty 50-50, quite tight at the moment, there’s a lot more market focus on the Labour Party’s policies on the retirement sector. And unfortunately, that’s had a negative impact over the past month or two. Some of their policies are perceived by the market as quite penal. So yeah, I think we’re just gonna have to see for the retirement sector, another headwind with the election, they might have to get through that before you start to see investors get a bit more interested in that sector.
Ryan Bridge
You’ve got a cost of living election and you got the politicians then going after the businesses. We’re seeing it with supermarkets. What about gentailors? What about energy?
Jeremy Hutton
Yeah, I mean, electricity has been interesting. Normally a bit of a political football, I mean, it’s been in the past high on the political agenda. But it seems like this time they’re sneaking under the radar a little bit more, I mean, helps a little bit that wholesale electricity prices have come back quite a bit in 2026, maybe slightly fortuitously. But yeah, they’ve avoided the worst of it. And I think that’s just providing a little bit of relief, hopefully in the future of consumers’ electricity portion of their retail bills going forward, but we’ll see how that goes.
It seems to be that the main parties – Labour, National – are a little bit more status quo on the electricity sector at this point in time. They’ve got a few policies around the edges with residential solar. You’ve got NZ First on one side proposing the structural separation. You know, it’s a little bit at odds with National and Act. So, you know, we’ll see how the negotiations go there. You’ve got the Green Party on the left coalition block with the Kiwi Power proposal. But seems like the main parties are a little bit more down the middle and that is reflected in the gentailors sector not being so much of a political football this time around.
Ryan Bridge
Election, I’m not gonna ask you to make a prediction because she’s tight as a tiger, but what do you reckon in terms of stalling growth or investment decisions or confidence, that sort of thing? I mean, do we go on hold until after we get a result?
Jeremy Hutton
Yeah, I mean, it’s interesting. Business – their confidence is gonna take a slight dent, right? But are they really gonna change their investment decisions over that period? I mean, maybe they take a little bit of pause and wait for the result and then it’s back on the same momentum that we were previously. But yeah, you’re right, it’s very close. I think businesses want to see what the final result is gonna be, what’s gonna be negotiated in the coalition or, you know, new government arrangements before you start to see it come through the results.
Ryan Bridge
Hopefully by Christmas, Jeremy. Good to see you, thanks for being on the podcast.
Jeremy Hutton
Thank you, Ryan, appreciate it.
Ryan Bridge
That was Jeremy Hutton, an Investment Analyst at Milford, talking to us about the economy now and what it might look like post-election. Just a reminder, you can like, follow and subscribe this podcast wherever you like to listen. Until next week, don’t forget to invest in yourselves.
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