But right now it doesn’t require much of a bounce to shift the economy out of the marginal technical recession we entered in the first quarter, with GDP growth of just 0.1 per cent into negative territory.
Meanwhile, there are signs of life in the property market, the latest surveys and commentary suggest.
The property market - for better or worse - remains a big driver of local sentiment.
The really good news in both the ANZ Business Outlook and ANZ Roy Morgan Consumer Confidence results was that inflation expectations are falling.
That means we are making progress on the sticky domestic end of the inflation problem.
The front end of the problem - global commodity pricing - has already largely resolved itself.
The bad news is that New Zealand’s economy remains reliant on commodity exports. If global demand keeps falling we may be in some trouble.
The blue sky narrative for New Zealand’s economy is that global commodity prices fall just enough to see off inflation without further interest rate pain, but not so much that we get caught in a real recession.
A real recession - in case anyone needs reminding - is one where people start losing their jobs in large numbers.
That is not what we’ve just been through. That was a technical recession (and only just).
The very real economic pain people are feeling is still almost entirely to do with inflation and mortgage rates, i.e. the high cost of living.
We are still a few weeks off a new official unemployment number, but the various surveys and job ad trackers show positions are being filled more quickly, and labour shortages are easing.
Economists, as they love to do, are shifting from supply-side worries to demand-side worries at a speed which can be hard to keep up with.
It is to be hoped that we land in a sweet spot, but after the wild pandemic-fuelled economic ride of the past three-and-a-half years, some degree of over-correction seems likely.
In that regard, New Zealand’s economy is relatively nimble.
Our Reserve Bank reacts faster than most of its global peers.
In theory, we’ll be one of the first through this interest rate cycle and, assuming a benign global economy, will soon return to our normal levels of underwhelming economic growth.
But while Prime Minister Chris Hipkins was in China last week - doing a solid job of repairing diplomatic relations and boosting our trade prospects with the economic giant - financial markets were busy worrying that slower Chinese economic growth might tip the world into recession.
Prime Minister Chris Hipkins met China Premier Xi Jinping in Beijing this week. Photo / Nathan McKinnon
China is a very big wild card for global recovery. It is a much bigger ship to turn.
It’s also in uncharted territory, politically, economically and demographically.
China has a consumer confidence problem.
Quite understandably the public there are still shell-shocked from the much longer and more arduous experience China had with Covid lockdowns.
Instead of spending their money on consumer treats or travel - or investing in the housing market - the Chinese are being cautious and saving.
That’s probably good news for those hoping to see inflation keep falling, but bad news for countries banking on export-led recoveries - like New Zealand and Australia.
For the past 25 years, China has been able to manage its economic cycles by tapping into its vast reservoir of consumer demand.
A few tweaks to regulatory settings and a well-placed patriotic word from the President would see consumer behaviour turn on a dime.
But there are now fears that Beijing’s power to explicitly direct the economy is waning.
Its economy is maturing and ageing - potentially following a similar path to Japan, which experienced deflation and economic stagnation after a big export-led boom in the 1980s and 1990s.
I would never bet against the Chinese economy. It may yet engineer one more stimulus-led recovery.
But right now it’s looking shaky.
All of this puts a bit of an edge into the economic debate as we head into the local election showdown.
If we have indeed bounced out of the recession in the second quarter, that will read like fair winds for Labour.
National has left itself open to that risk by targeting the emotional power of the “R” word in spite of economists viewing the 0.1 per cent March quarter fall as marginal.
It might have been safer to stay focused on the current cost of living pain and warn of longer-term economic woes facing the nation.
The pace of this economic cycle may yet deliver fair winds for National.
We could bounce too hard, causing inflation to stay elevated and the RBNZ to lift rates again.
Or maybe economics will be less of a factor than headlines about crime, social policy and ministerial dysfunction.
Labour appears to be its own worst enemy right now.
But it looks increasingly likely that whoever wins in October will be sailing into a whole new variety of economic storm.
Liam Dann is Business Editor at Large for the New Zealand Herald. He is a senior writer and columnist as well as presenting and producing videos and podcasts. He joined the Herald in 2003.
