Omicron threatens re-opening

<p>Kia ora,</p><p>Welcome to Thursday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news the world's factories seem to be in a good expansion mode - except in China.</p><p>But first we should note that the OECD <a href="https://www.oecd-ilibrary.org/sites/66c5ac2c-en/index.html?itemId=/content/publication/66c5ac2c-en" target="_blank"><strong>says</strong></a> the rise of the Omicron pandemic variant threatens to intensify supply shortages and inflation. They are positive about New Zealand with strong growth forecasts for this year and next, but they are <a href="https://www.oecd-ilibrary.org/sites/66c5ac2c-en/1/3/2/34/index.html?itemId=/content/publication/66c5ac2c-en&_csp_=9b4ecb1aafc11518f34da944ee244a5b&itemIGO=oecd&itemContentType=book" target="_blank"><strong>warning</strong></a> of an overheating economy here and excessive inflation that will need to be addressed.</p><p>Countries are hardening their border responses to the Omicron threat, which in turn will slow international travel and the related industries that thought they were on the way back.</p><p>The US <a href="https://adpemploymentreport.com/2021/November/NER/docs/ADP-NATIONAL-EMPLOYMENT-REPORT-November2021-Final-Press-Release.pdf" target="_blank"><strong>ADP employment report</strong></a>, ahead of this weekend's non-farm payrolls report, shows a broad-based rise in hiring, even if it isn't a special jump. Analysts see the non-farm payrolls rising a similar +550,000 in November to keep their expansion on track.</p><p>There were many November PMIs released around the world overnight. In the US, <a href="https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/pmi/november/" target="_blank"><strong>the ISM one</strong></a> expanded slightly faster on strong new order data. <a href="https://www.markiteconomics.com/Public/Home/PressRelease/97ef7f52dbc7469988560