Here’s where to look for evidence of a recovery

The local reporting season kicks off this week across the NZX, and we’ll get some useful insights into the state of the economy.

These will tell us if the long-awaited recovery is truly upon us, or if it’s another false start like we saw a year ago.

Many higher profile economic releases tell us more about the past than the future.

If you prefer to listen to a podcast episode on this topic: 

The GDP report is one of these, because of the time it takes to be prepared and released.

It’ll be mid-March by the time we see the one covering the December quarter, by which point the events of October last year will be old news.

Unemployment figures come out more quickly, but the labour market tends to be a lagging indicator.

It is often strong heading into a recession, with unemployment only rising once the downturn has become entrenched.

There’s a similar lag coming out of a downturn.

When the recovery first takes hold, businesses first try to get more out of their existing workforce.

They’re cautious about taking on more permanent staff until they see more evidence things are getting better.

The other week’s unemployment figures were important, which is why they got a lot of attention.

However, what they don’t do is tell anything about where the economy is at right now, let alone where it’s headed.

That’s why I’m looking forward to digesting all these earnings releases over the next few weeks.

They’ll tell us whether the confidence surveys, manufacturing indices and other more timely indicators are genuine signposts or head fakes.

It won’t necessarily be the numbers themselves that tell the story.

These earnings reports will cover the second six months of the 2025 calendar year, so revenues and profits might still be subdued.

It’s the outlook commentaries I’ll be watching, where boards and management teams comment on how the more recent trading period has been.

I’m hopeful many businesses have seen a pickup in activity in these first 7-8 weeks of the year.

There’ll be plenty to watch, with many listed corporates under the microscope and some real heavyweights set to announce results in the coming days.

Contact Energy, a2 Milk and Auckland Airport are all up next week, while Freightways is also one to watch closely.

Not only is it a well-managed company, but it’s a useful barometer of economic activity.

Others that are sensitive to the state of the economy include Port of Tauranga and Fletcher Building, while Summerset might offer some clues to the path of the housing market.

The listed property sector will also be in focus, with lower interest rates and a steady recovery likely putting tenants in a stronger position.

It’s had a soft start to 2026, but it trounced the broader market last year with a 12.7 per cent return.

There’ll be plenty to learn over the coming few weeks.

While the results themselves might still be subdued, I’d put more emphasis on the comments about how this year is shaping up so far.

How are forward orders and bookings looking? What do the past several weeks look like compared to 2025? Are any businesses confident enough to offer some early guidance for the year ahead?

This is where investors should be looking for firm evidence of a recovery story, not in dated GDP releases or reactive labour market statistics.

If the domestic economy is genuinely turning a corner, we’ll hear that loud and clear from management teams this month.

Market Insights enewsletter

Keep up to date with our fortnightly Market Insights enewsletter. Our research team provide timely and regular commentary and analysis on market developments, understanding investment jargon, and the impact of current events.

Subscribe Now