GDP figures 'undoubtedly going to be negative', but recession already over - economist

While the next GDP figures are likely to show we're in a recession, chances are we're already out of it, an economist has claimed.

The economy shrank by 1 percent in the last three months of 2020, more than the big banks predicted. If it's down again in the first three months of 2021, that would mean we're in a recession. 

"I think we are in a recession, at least in regard to the technical definition - two negative quarters," economist Cameron Bagrie told The AM Show on Tuesday.

"We got a negative quarter for the December quarter in 2020, I think we'll see the same for March 2021. Good news is... we're now in April, and the odds are we're actually out of it and on the other side."

The figures for the March quarter won't be out until mid-June. But while they're "undoubtedly going to be negative", Bagrie says right now there are signs the worst is already over, with job ads up and Jobseeker numbers down

"Glass half-empty in regard to Jobseeker numbers - there's still more than 200,000 people out there out of work. There are 350,000-odd people on more broader benefits - that' about 11.5 percent of the working-age population, so basically one in nine - that's a big, major economic problem. 

"But if I have a look at trends in Jobseeker numbers over the past three months, they're basically coming down slowly and steadily. Part of that is seasonal and horticultural work et al, but if I have a look at job ads, another timely economic barometer, job ads are up on the same levels 12 months ago. 

"If I have a look at some regions across New Zealand - Hawke's Bay, Gisborne - job ads are 150 percent of where they are in 2019. So some parts of New Zealand are still rocking and rolling." 

Unemployment, at least when measured by people on the Jobseeker Support benefit, peaked in mid-January at 213,852. That figure has fallen every single week since then - now at 202,848 - but remain well up on the pre-March lockdown figure of 145,000. 

The highest percentage of adults receiving Jobseeker Support is in Northland (10.9 percent), followed by Gisborne (9.8), Bay of Plenty (8.7), West Coast (8.7) and Waikato (7.6). The lowest rate is in the Chathams (3.5 percent), followed by Otago (3.9), Southland and Tasman (4.6) and Marlborough (4.7).

In Auckland it's 6.3 percent - just below the overall figure of 6.5 percent. 

The number of people on any main benefit peaked a week earlier at 391,227, but has also fallen every week since. There are now 368,028 people receiving any main benefit, about 67,000 more than before the March lockdown. 

Bagrie says the economic recovery hasn't been evenly distributed - people who own houses have seen their wealth go up by hundreds of billions between them, but those relying on traditional "pay packets" might not have been so lucky. 

"We feel a little bit wealthier, but ironically productivity growth is not telling the same economic story. What we've got out there at the moment is that classic K-shaped cycle; some parts of the economy - housing - is doing well, it might be a bit of a different story in the next 12 months, but tourism, she's pretty tough out there."