The Reserve Bank of New Zealand published research assessing how changes in the Official Cash Rate (OCR) transmit unevenly across the economy, finding that some GDP sectors and domestic (non-tradables) prices respond materially more than others. At the sector level, goods-producing and goods-trading industries, along with housing and real estate-related activity, are among the most sensitive to OCR movements and tend to cool more quickly when the OCR rises. Primary production, including dairy and meat, and public services are estimated to be among the least sensitive. For non-tradables inflation, the analysis finds accommodation services and housing construction costs are relatively responsive to tighter monetary policy, while subgroups such as energy, household power prices and insurance are less sensitive or slower to adjust. The analytical note flags that a small sample size leads to greater variation in estimated effects across model variations, positioning the results as a starting point for further work.
Reserve Bank of New Zealand 2025-06-16
Reserve Bank of New Zealand research identifies which sectors and non-tradables prices are most sensitive to OCR changes
The Reserve Bank of New Zealand's research indicates that changes in the Official Cash Rate (OCR) affect GDP sectors and domestic prices unevenly, with goods-producing industries and housing being most sensitive, while primary production and public services show less responsiveness. The study highlights accommodation services and housing construction costs as responsive to monetary policy, whereas energy and insurance prices adjust more slowly.