Author: MIL-OSI Publisher

Economic outlook has been upended again, with ASB economists expecting a prolonged period of higher oil prices through much of 2026 following the Middle East conflict and disruption through the Strait of Hormuz.

ASB Economists have lowered their 2026 annual GDP growth forecast by 1.6 percentage points, with higher fuel costs expected to weigh on consumer spending, tourism and business investment.

Inflation is expected to rise again in the near term, peaking around 4% by mid‑2026, presenting a challenging balancing act for the Reserve Bank of New Zealand.

The outlook for the global economy has been upended again and uncertainty has intensified, with tensions in the Middle East disrupting oil supplies, pushing energy prices substantially higher and creating fresh challenges for New Zealand’s economy, according to ASB’s latest Quarterly Economic Forecast.

ASB’s Chief Economist Nick Tuffley says the effective closure of the oil‑critical Strait of Hormuz, a key transit route for 20% of global oil supplies, has triggered significant upward cost pressure that we are already seeing flowing through to fuel prices, which will send inflation higher over the coming year and weigh on spending across the economy.

“Households were only just starting to feel some relief,” says Nick. “Higher fuel prices are now squeezing budgets again, and that pressure will be felt right across the economy.

“We import all of our refined fuel, so sustained increases in oil prices quickly feed into higher transport costs, higher inflation and weaker household spending.” He adds, “Unfortunately, New Zealand is vulnerable to this disruption.

“Prior to the oil shock, New Zealand was positioned for a modest recovery over 2026, supported by lower interest rates, easing cost-of-living pressures and signs of improvement in the labour market. With the new headwinds of higher fuel prices and potential fuel scarcity, that recovery is now unlikely to take place until 2027.”  

ASB Economists have revised down their 2026 December annual GDP growth forecast by 1.6 percentage points. Economic output is expected to contract in the June quarter as higher fuel prices weigh on consumer spending, disrupt tourism and lower business investment.

Inflation pressures are also set to re‑emerge. ASB expects higher fuel, freight, and airfares to push annual inflation up to around 4% by mid-2026, before easing back below 3% in 2027 as energy prices stabilise and domestic demand remains muted.

The renewed inflation risk also complicates the Reserve Bank’s outlook, with the Official Cash Rate expected to remain on hold for now, but with rising risks of an earlier tightening cycle if inflation pressures become more persistent and inflation expectations creep higher.

“The RBNZ has reaffirmed it will focus on the medium-term impacts on inflation, not the more immediate impacts,” says Tuffley. “In time, the OCR is still likely to go up, but we don’t see the RBNZ rushing.”

Despite the challenging outlook, ASB economists note some silver linings. The dairy sector remains a bright spot, supported by strong global prices and the flow‑through of the payout from Fonterra’s Mainland Group divestment, while the tourism sector was supporting growth prior to the oil shock.

Nick notes, “This is a time for contingency and scenario planning rather than reliance on any single forecast. If the conflict eases sooner than expected, the outlook would improve quickly. But for now, households and businesses need to be prepared for a tougher, more uncertain period.”

The latest ASB Quarterly Economic Forecast, along with other recent ASB reports covering a range of commentary, can be accessed at the ASB Economic Insights page: https://www.asb.co.nz/documents/economic-insights.html

The southern hemisphere’s largest multidisciplinary surgical meeting will return in 2026 when the Royal Australasian College of Surgeons (RACS) brings its 94th Annual Scientific Congress (ASC) to the Perth Convention and Exhibition Centre from Thursday 30 April to Sunday 3 May.

Surgeons, Trainees, researchers and healthcare leaders from across Australia, Aotearoa New Zealand and the world will gather to explore this year’s theme, The art and science of collaboration.

Highlights of the program include keynote sessions exploring global health ethics, the future of artificial intelligence in medicine, and the evolving professional and ethical challenges facing modern healthcare.

• Professor Annie Sparrow, internationally recognised paediatric intensivist and global health expert, will deliver The politics of professionalism. This plenary will draw on Professor Sparrow’s decades of frontline work in conflict and humanitarian settings to explore the weaponisation of healthcare in war.
• Dr Jordan Nguyen, engineer, inventor and biomedical innovator, will explore the transformative potential of artificial intelligence and emerging medical technologies in his plenary, asking: I’m a surgeon: will I still have a job in 10 years?
• Chelsea Gordon, a legal and strategic advisor to hospitals, government and private healthcare providers, will join Dr Nguyen, discussing how AI is being implemented safely and responsibly in highly regulated sectors such as healthcare.
• Dr Mohit Bhandari (India), leading bariatric and robotic surgeon and president of IRCAD India, will be explore = how advances in robotics and digital connectivity are rapidly reshaping the way surgeons operate, collaborate and teach in Across oceans – at the console: the reality of telerobotic surgery.

The Congress will also feature an impressive lineup of local and international speakers, including:

Professor Nehmatt Houssami (Sydney, Australia) – on the latest updates and suggested guidelines to refine our National Breast Screen Program
Conjoint Professor Carolyn Hullick FACEM – (NSW, Australia) – on improving emergency care for older patients
Professor Joon Pio Hong (Seoul, South Korea) – on reconstructive microsurgery, wound healing and supermicrosurgery innovations
Professor Matteo Rottoli (Bologna, Italy) – on minimally invasive and robotic colorectal surgery
Dr Anna Ibele (Utah, USA) – on the impact of obesity and bariatric surgery on cancer risk
Lt. Col Steven Jeffery (Birmingham, UK) – on burns and plastic surgery in austere and military environments
Dr Anjay Khandelwal (Ohio, USA) – on advances in burn surgery, reconstructive techniques and global burn care

The RACS Annual Scientific Conference is the College’s flagship educational event and is recognised as one of the most significant surgical meetings in the region. It showcases the latest in surgical research, emerging technologies and advances in patient care, while providing a forum for collaboration across nine surgical specialties, plus a host of subspecialties and interest groups.

ASC Convener Associate Professor Mary Theophilus said this year’s theme reflects the reality that modern surgery hinges on strong partnerships across medicine, science and technology.

“Progress in surgery has always relied on collaboration,” Associate Professor Theophilus said.

“Today that collaboration extends far beyond the operating theatre. It includes sharing knowledge with other disciplines, forging partnerships with researchers and industry, and integrating new technologies like robotics and artificial intelligence into surgical practice.

“ASC 2026 will bring together surgeons and experts from across healthcare to explore how these collaborations are shaping the future of surgical care.”

The Congress will also include the College’s Convocation Ceremony, where newly qualified surgeons are formally welcomed as Fellows of the Royal Australasian College of Surgeons.

“ASC is an opportunity for the surgical community to come together to learn from one another, challenge ideas and strengthen the relationships that ultimately improve patient care,” Associate Professor Theophilus said.

“It is also a chance to showcase the extraordinary work of surgeons across Australia, Aotearoa New Zealand and beyond.”

For more information about the RACS Annual Scientific Congress, visit:
 https://asc.surgeons.org

Construction cost increases remain mostly modest, but a sharp rise in fuel prices is causing upward pressure in the short term.

CostBuilder is New Zealand’s most comprehensive online subscription-based building cost platform. In its latest monthly update, more than 11,000 current material prices were applied to its extensive database of construction rates across Auckland, Hamilton, Palmerston North, Wellington, Christchurch and Dunedin.

The update shows overall cost escalation remains relatively contained, with elemental and trade rates both increasing by an average of 0.4% in a month.

However, rapidly rising diesel prices have begun to flow through into construction costs, particularly in fuel-intensive areas of work.

At a trade level, excavation recorded the most significant increase, rising 7.8%, while piling (1.4%) and demolition (1.3%) also increased – largely due to the recent surge in diesel prices.

Site preparation and substructure costs also increased by 2% and 1.8% respectively due to rising diesel rates, with exterior works up 1% in a month.

QV CostBuilder spokesperson and experienced quantity surveyor Martin Bisset said fuel was the key cost driver currently.

“The increase in the price of diesel has had an immediate impact on areas such as site preparation, excavation and substructure work, where fuel is a significant input for machinery used in these operations. That’s where the most upward pressure on construction costs is coming from right now.”

The rise in fuel costs comes amid increasing global oil prices linked to conflict in the Middle East, which is also affecting supply routes and lifting freight and energy costs internationally.

Mr Bisset said that while the recent fuel spike was significant, its full impact on overall building costs was not yet clear.

“New Zealand is particularly exposed to changes in fuel and shipping costs, so recent geopolitical events in the Middle East are relevant for the local construction sector, and they will inevitably have an effect,” he said.

“At this stage, we can see the effect at a trade and elemental level, but the impact on total building costs per square metre hasn’t yet been captured. We expect to have a clearer picture of that in our next CostBuilder update.”

In the meantime, he said the current environment differs from the sharp and sustained cost escalation experienced during the Covid-19 period.

“We’re not seeing the widespread supply chain disruption of recent years, but fuel and freight are certainly re-emerging as important cost drivers.”

“It’s important to recognise that this appears to be a short-term spike at this stage. At some point, fuel prices are expected to normalise, and that should ease some of the pressure coming through.”

More broadly, construction cost movements remain mixed. The latest update also recorded increases in materials such as plasterboard, insulation and some timber products, while some copper and steel pipework declined in price.

Mr Bisset said the market remained relatively balanced overall, but with a higher degree of uncertainty.

“The key takeaway is that cost growth is still relatively moderate, but volatility has increased,” he concluded.

Visit QV CostBuilder at costbuilder.qv.co.nz.