Finance Minister Michael Cullen said the sharp decline in business confidence shown in the National Bank outlook was in line with other surveys and – like them – was driven by external factors.

“The drop reflects the continuing fallout from the terrorist attack on the United States and is being experienced in other economies around the world,” he said.

“It was probably inevitable that the reaction would flow through to firms’ expectations of their own growth prospects.

“However, while the ‘own activity’ indicator has also dropped sharply, it remains in positive territory with a net 18 percent of respondents still expecting an improvement.

”This reflects the relative robustness of the New Zealand economy as we continue to feel the benefits of good export prices, a competitive dollar, low interest rates and a supportive policy framework,” Dr Cullen said.

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