Business Confidence Still Weak - Survey

Monday, 30 July 2001, 11:27 am
Press Release: Business New Zealand

Manufacturing Survey Shows Business Confidence Still Weak

The latest WestpacTrust Manufacturers Business Opinion Survey for the June quarter shows business confidence has improved, but at 3% is still very weak, says Business New Zealand Chief Executive Simon Carlaw.

'The short-term activity outlook is positive because stronger exports and domestic sales are expected but there are concerns about the longer-term outlook because investment intentions have fallen," Mr Carlaw said.

"The lack of investment is a major concern because of the increased number of companies reporting that lack of capacity is limiting their ability to increase turnover.

"Firms remain under cost pressure so further price rises are expected. Not all firms are in a position to pass on price increases so profits and hence business confidence remains under pressure.

"While inflation is higher than the Reserve Bank is comfortable with, a cut in interest rates next month may be required to stimulate investment - and should reduce longer term inflation concerns," Mr Carlaw said.

The full report is available under 'Commentaries' on www.businessnz.org.nz

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