Episode Details

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Kia ora.

Welcome to Tuesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.

I'm David Chaston and this is the international edition from interest.co.nz.

Today we lead with news surging exports and a range of stimulus measures (subsidies) are bolstering Chinese economic activity. It is a track likely to run into stiff resistance from many of the countries targeted by these subsidised exports - so the Chinese economic stability may not last much longer.

But first in the US, the Wells Fargo/NAHB house builder sentiment is being squeezed by higher costs and buyer affordability restraint. Their index fell for a second consecutive month to its lowest since June 2012. Sales expectations in the next six months dropped to the lowest since November 2022.

The US has trimmed some tariffs on Canadian lumber but that is not expected to have much impact. Meanwhile in Canada they reported CPI inflation running at 3.1% in September, only marginally higher than August and less than the 3.2% expected. It has been holding at this level since May and kept up due to fuel prices of course. (It is still notably lower than their southern neighbour's 3.7% September rate, but then, they don't have the tariff pressure the US has imposed on itself.)

And staying in Canada, a key survey of consumer inflation expectations has them at 4.0% for the year ahead which is just a whisker higher than what those surveyed thought inflation was running at presently.

Meanwhile a Canadian survey of business sentiment shows it improved in in Q3-2026 after deteriorating in the previous quarter. But to be fair most of these survey responses came before Trump's latest outburst.

In China, 16 of their 70 largest urban areas had a small rise in new house prices in September from August, four has no change, while the rest reported small declines. Overall, these new house prices were down -2.8% from a year ago, a slightly smaller decline than in August. For existing homes, the improvement was less and the year-ago change approached -6%. So not noticeable improvement in their housing markets.

China reported that its Q3-2026 economic activity grew +4.5% from the same quarter a year ago. That was better than the 4.3% in Q2-2026. They have a GDP growth target of "about 4.5%".

China said its industrial production was up +5.5% in September, better than the 5.2% claimed for August. But they also said their electricity production was -1.2% lower from a year ago, w