Pessimism Still Abounds
BNZ Confidence Survey
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Pessimism Still Abounds
We have changed our BNZ Confidence Survey to a monthly survey and as it is in fact six weeks since our last survey one might have thought there would be a decent change in net confidence. But this latest survey shows that a net 51% of respondents expect the economy to get worse over the next year. This is basically unchanged from the net 52% pessimism recorded in our May 26 survey so probably says something statistically strong about the survey method. The main thing of relevance here is that it says high caution still prevails about the economy going forward and this in line with the likes of today’s survey from NZIER.
With regard to the industry comments here are some of the main comments we have picked up on – there are plenty of other general threads running through though including a tight labour market and bad margin pressures.
- Accountants & Lawyers – both busy with strong staff shortages.
- Agriculture – slight improvement in sentiment following the fall in the NZD
- Construction – still strong at the moment but residential displays some signs of easing, commercial strong.
- Manufacturing – easing off, highly variable though with hopes of further currency decline.
- Real estate – easing off slowly, no panic. Buyers still there but less urgent, vendors needing to adjust price expectations. Listings shortages though in many areas.
- Retail – easing off, especially for furniture.
- Tourism – slight easing, nothing drastic.
Survey Date Better % Same % Worse % Net % # of respondents # of comments 17 February 20.3 41.1 38.5 -18.2 423 - 3 March 17.2 40.2 42.6 -25.5 687 224 17 March 8.5 36.5 54.9 -46.4 550 294 31 March 6.1 27.7 66.2 -60.1 393 201 13 April 6.0 31.8 62.2 -56.3 336 165 28 April 6.2 25.6 68.2 -62.1 340 185 12 May 7.2 35.2 57.6 -50.3 304 148 26 May 6.1 35.8 58.1 -52.0 179 81 7 July 9.0 31.3 59.8 -50.8 502 279
INDUSTRY COMMENTS SUBMITTED BY RESPONDENTS
- Extremely busy. Hard to find staff with experience.
- Busy time of the year. Still a major shortage of skilled qualified accountants who want to work! Salary pressure to retain good people. Fee resistance being experienced, primarily from those clients in the export sector where profits are increasingly difficult to generate.
- Much the same in accountancy. If the economy worsens there will be client problems to address.
- Accounting - very busy, lack of suitable staff.
- Manawatu accountancy practice - we have needed additional contract staff to cope with present workload. Rural outlook positive with declining dollar and stable interest rates, but more caution.
Property market has continued strong demand without the overheated prices of other areas. A good place to weather any national downturn.
- Small chartered accountancy practice. Plenty of work and have overstaffed after short staffing probs.
Still not many cvs coming thru the door so assume that job market still tight. All staff have had large pay rises which will pass on to clients. Staff looking for first homes seem to feel that the market has slowed.
Staff who have gone into the sharemarket instead very happy.
- Chartered Accountancy Practice - rural based - workload has not eased off for at least last 12 months & looks like continuing for at least rest of this year.
- Accounting: Level of activity in our industry is high, very little receiverships and liquidations on at the moment, suggesting the bad times haven’t really hit yet.
- Accounting: Shortage of skilled staff is still a key issue plaguing the industry. Cost of high quality staff has gone up 20-25% over the last year and still rising. Demand for services provided by the top end business professionals is at its historical high. With high growth in sectors such as Management Accounting, Financial Accounting, Business Consulting, Internal Audit and Business Development.
- A very busy time of the year so difficult to tell if economy is slowing. Level of enquiry and ’things happening’ is still very high so expect a strong 2005.
- About the same.
- We are Accountants in Provincial NZ and believe the huge bubble will now contract.
- Accountancy - still very busy, quite a bit of new work, especially from overseas. Are people seeing NZ as a "safe bet"? Finally managed to employ additional graduates which will be a godsend when they have been trained.
- Accountancy is very busy
- Demand for advertising space (lead indicator) in 2006 growing at 1% to 2% PA rather than 7% in past year. I.E soft landing.
- Farming. Lower Kiwi should give farm gate prices a boost if sustained into the new production season - Better … sheep farming/dollar falling.
- Agribusiness: Plenty of activity and strong interest in possible farm purchases.
- Dairy farming ; Frustration over lack of information on impact of lower NZ$ on farm payout price for milk solids.
- I’m a retired Veterinary Surgeon. To me that and the associated farming industry are looking better.
- Agriculture - falling dollar relative to $US may be beneficial, especially for beef. However the effect on lamb may not be as large as expected, simply as it is the $US strengthening against all currencies i.e.
Euro cross rates with $NZ may not move much. The effect on dairying will depend on how much hedging Fonterra has undertaken.
- Sheep & Beef. Holding. Maintaining firm control on spending. Rising cost of insurance/ACC annoying.
Leasing capital equipment rather than purchasing. Main shear wool returns 8% down on expectation due to climbing NZD. Lamb prospects good, international commodity prices low when adjusted for international inflation. Beef schedule indifferent but cattle doing well on farm. Good rain today.
- We rely on the farming sector for a big % of our business as a rural vet practice, and stock prices and grass growth are holding up well. But the lower milk payout, and higher fuel & interest rates, are increasing both our expenses & those of our farmer clients.
- Dairying, lower payout and the use of higher cost production systems, means lower returns, at present farmers are positive due to kind winter.
- Agricultural service industry. Very competitive, low margins past economy and ourselves have made it this way.
- Dairy Farming. We produce around 130,000 ms. Payout is predicted to drop 50-60 cents/ kg ms. I figure a drop in income of $70,000- $80,000 add to that the increased costs that Auntie Helen has pushed on to all business people, I would say there will be a fair bit of pain in the provinces and then through to the cities.
- 5% growth
- As tenuous as ever (the arts), so, the same.
- What with the housing market showing signs of real slowdown ( re:- the fact that housing forms at least 65-70% of security for Business lending), the credit off take is already showing a slump. With volatility in the various sectors and now coupled with the new terrorist threat over the ’first’ world, the possibilities do not look too bright.
- Our industry should continue to enjoy growth as we are in the bottled water market.
- We are busy with strong growth. A lot of strategic type work. A lot of project management of business development work.
- Cautious optimism (business consultancy, particularly multi-nationals, SME’s and local govt).
- Demand is still strong for quality SME assistance.
- Business consulting has become extremely price competitive.
- Business advisory services Wgtn. The lack of trained staff is really starting to bite and the wage creep has really started could be said to be more of a run.
- As consultants to the SME sector any downturn in the economy is usually positive for us as SME’s seek more help in more trying times.
Capital Equipment Supply
- Sales slowing up
- Continuing strong forward orders despite aggressively raising USD prices to foreign customers. Recent weakening in NZD will help further.
- Business Clients becoming quite cost conscious - obvious that companies are looking at all costs including the small charges in attempt to save cash flow
- We are still getting real (inflation + 50% of inflation) growth in wholesale and retail while managing increased costs.
- Residential - Slight seasonal upturn. Enquiry level quite high.
- Some signs of slowing in some sectors of the residential market. Forward orders still very strong.
- Commercial construction: steady for 2 years.
- House Developers- Slowed down.
- Residential Building - There are a number of concerns including: Building Act, Consent Process, Net Migration trends, Interest rates, Household Debt, Company Liquidations etc.
- Residential Construction - everyone talking doom and gloom, not reflected in figures yet, expect things to stay the same.
- Consent applications continue at a slightly higher level than last year and new dwelling starts are up 7% on the same time last year.
- While the economy may be ’worse’ it will be coming off a building boom making it more like a ’normal’ year. There will be still lots of good sound business for us and it will be easier to manage than the boom times when we were struggling to supply putting pressure on capacity, quality, and resources.
- A falling off of new work is becoming apparent(residential architecture.
- Commercial construction in Wellington will remain strong.
- Construction Industry : Enquiry level very low for the last 4 - 5 weeks, confirmed by many associated trade companies. The slow down is being put down to the uncertainty of the coming election, and a June financial year end for many businesses.
- Building/Architectural Draughting self employed. Plenty of work, no slow down visible, residential may slow but commercial will take up slack. Recent building code changes increase the amount of work needed up front, before the first sod is turned. Documentation has to be very thorough to meet new compliance standards. There is a lack of skilled people to produce this and so wages & costs will escalate.
- Tightening up - builders advising that future jobs are not being confirmed.
- Importer of Plastic Sheet (primarily) for Bathroom ware market….Sales volumes definitely slowing down.
With the recent sharp drop in exchange rates we may well be faced with some material cost price increases shortly. To date we have been buffered from these due to the strong Kiwi dollar.
- Housing repairs maintenance still going strong like an Indian summer.
Credit Reporting and Debt Collections
- Conditions are getting firmer as many companies start their new financial year and review terms with their clients.
- We are expecting a busier time in our business - debt recovery
Early Childhood Education
- Real struggle to obtain competent staff. Govt funding increase is wrongly targeted and will not make intended improvement in quality.
- International Student enrolments continue to be down on last year and the trend is accelerating.
Comments from some Australian Universities met recently suggest that the same is happening over there. Articles from journals overseas suggest that this is a world wide trend. There are apparently over 100 new Universities being built in China at the moment.
- Tertiary education sector will worsen in terms of international student enrolments but most likely will increase in terms of domestic and part time enrolments over the next 12 months. Net will be flat to slightly down in enrolments.
- Dollars recent drop the best news in ages. July and August are looking not too bad with newish market Saudi Arabia strong and holiday groups from traditional markets such as Japan and Korea going OK.
New student visa policy as suspected has done nothing to aid diversity from other potential long term study markets such as East Europe and Latin America.
Egg Production (Primary)
- Production volume vs. Sales volume in balance. Wholesale price levels look static for next 3 months.
- The electricity industry is in a state of flux with some key decisions regarding the sector structure and major new investments in generation and transmission being held off until after the election. There are serious concerns that power supplies to Auckland are becoming critical with delays only exacerbating the situation.
- Not much change but slight downturn next 6 months
- Electrical commercial contracting and maintenance
- Skill shortage continues. Not as many quotable contracts to be found last month, is a sign I use to bench mark future economic activity in our sector of the industry
- Showed growth of double digits twice then sharp reduction to single digit growth as measured against previous corresponding periods. With the high in the middle the reduction following was a sharp drop.
The positive is the last period still shows growth in the region of 5%.
- Engineering work slowing down a bit in the south, going out looking to bring a bit more in.
- With lower dollar, exporters should be more confident. Do not believe things are as "bad" as every one says. Enquiries in equipment market are holding up in most parts of country.
- With raw material prices going up so quickly, this will slow down the growth in demand and put pressure on domestic competition.
- Building Society- good level of deposits and also mortgage activity.
- Mortgage Finance. Activity has noticeably slowed from Brokers. Not as many "pie in the sky" applications. Perhaps people taking notice of economic and political indicators? Perhaps uncertainty of election date as well?
- Mortgage enquiry stable/flat. Good quality still available.
- Financial Services - outlook is good as we continue growth within a niche market.
- Finance Company, Business has slowed over past month +, less loan inquiries and lower quality client.
- Lot less people with hard cash about.
- Large uncertainty with the proposed CV basis for determining tax on offshore investments. Huge irony in that this proposal has flowed from a govt task force designed to remove distortions from the tax system
- Continuing to be very difficult despite the easing NZ$
- The fin fishery in the top of the South Island is struggling through high fuel costs, and the high levy costs of Government Departments. Fish Processing Companies are looking at their markets, and pricing structures to see if they can assist the fishermen in some way through increased prices being paid for finfish. However, there is some opposition from the buying public, to higher purchasing prices. There has been some increase in the prices being paid for lobsters, not only because of the better NZ/US dollar, but both Japan and Taiwan have decided to purchase. Supplies from Western Australia have decreased earlier this season and this has also helped the prices being paid to the fisherman in New Zealand.
- The reduction of US/NZ will assist the seafood sector but the fall is insufficient and the impact is still some time away.
- Thank goodness for the falling dollar - great for the Seafood industry, and for me personally with $ still in the US.
- Seafood-prices reasonably good in local currencies but conversion still impacted by level of NZD.
Interestingly recruitment tightness has seemed to ease marginally over last few months.
- Residential & Commercial demand continues to outstrip available installation labour. Material is almost without exception available on demand. Anecdotal forecasting suggests the activity of the last six months will continue for at least another 12 months - known commercial work plus new residential project plans are still being brought in for pricing.
- Tough trading, slow sell-through, not disastrous though
- Not good. lots of change, forests being put into farm land, high dollar & high shipping rates hurting export.
- We expect the forest industry to improve over the next 12 months, this could gain momentum if the exchange rate continues to fall.
- Forestry & processing: worse. Markets weak, govt policy very weak & damaging - Kyoto, energy, transport, etc
- Increased demand for Healthcare services but growth is hampered by financial constraints, particularly the public sector.
- Medium term prospects and suspect long term - good
- Bad in the Auckland plant hire industry right now
- Avocadoes – Excellent with crop up and dollar down and Australia short of crop.
- Kiwifruit industry looks ok, with dollar heading down and fruit quality better than last season.
- Synergism of rising oil & petrol prices and Kyoto taxation will result in closing of small to medium glasshouse operations which will result in less supply and inevitably high food prices. Larger corporate operations have foreseen these changes, and will presumably increase importation of food stuffs overseas. Average family will increasingly find it difficult to maintain household.
- We have experienced a boom year with high tourism from not only the Lions tour but also general tourist numbers and NZ being a great place for conferences etc.
- Hospitality - Very poor, the earlier estimated 10-15% downturn may , with Winter now biting , be 25 - 30%.
- Slowing down as usual for the winter season but good indications for a busy summer.
- Traditional slow down for the 3 months of winter is being experienced now but forward bookings into spring and summer are relatively strong although currently slightly behind where they were a year ago.
- Restaurant/bar; customers are spending less and non smoking law having negative effect in winter
- Recruitment - in Term Resourcing (Permanent, Long Term, Fixed Term, Short Term roles) there appears to be some hesitancy ahead of the election.
- Recruitment agency Hard to find candidates to fill positions.
- Slight slowdown but underlying fundamentals still strong - executive recruitment
- Insurance Broking. Very competitive market with new business coming and going like no tomorrow.
- We are a specialist insurer in the Australian Pest & Weed market. We are noticing a number of consolidations where some of the smaller players are being bought out. Additionally we are finding some operators are pulling out due to the difficulty of running a business in Australia.
- Still feels buoyant, at the below $150K project level. We stand by earlier comments that the Sept quarter will be the indicator for the next 12 months as companies re-start their annual spending cycle from July/Aug with adjustments up or down depending on their own investment outlook. Spending on infrastructure improvement continues to be steady, perhaps that is the driver, as companies look for a return based on cost savings.
- Health IT - Looking positive and we are hiring.
- Demand is strong in IT wholesale, driven by cyclical upgrades of computer infrastructures and in particular for our business because of weakened competition after being purchased by a multinational.
We expect freight charges to increase from sustained higher oil prices and a weaker dollar - we expect to pass on these increases.
- Software - Good people are leaving NZ for the much higher salaries/packages. Also the movers and shakers want to run their business - not spend half their time worrying about government red tape.
- IT - Busy at the moment.
- IT industry. Lots of opportunity.
- Just got back to NZ after 7 months travelling. Seemed to be quite a few jobs out there, though more were at the higher end (5+ years experience). Took me 5 weeks to get a job which was on par with what I had before I left.
- Software reseller. Market Slow.
Kitchen and Bathroom cabinet manufacture
- Ordering slightly ahead of last year which doesn’t make any sense considering the news over the last 6 months.
- Kapiti. Demand for sections still firm.
- Land development in Kapiti / Wellington remains very strong, as Surveyors and Planners, we have never been busier.
- Property & Land development. Looking less positive than it has in the past few years. Construction costs escalating rapidly, capacity constraints still, and revenues flattening off. End result, margins being seriously squeezed and interest rates still high!!!
- From the designers viewpoint is steady, with ample work in hand.
- Landscape services Because of the falling dollar we are suddenly going to realise the expense of petrol within the general business field which in turn affects everything you buy or do.
- There seems to be an easing off over the last month of the pressure. It is steady now and no lack of work but just not as frenetic as it has been for the previous 24-36 months.
- Fairly quiet.
- Provincial legal Dunedin - rental housing picks up as the market settles, so that is the same. Retailing looks like it gets harder - good margins don’t last long, and someone is always looking for a way to deliver the Chinese manufactures cheaper. But our industry works well if we work hard.
- Law/ positive growth but with the election looming clients appear to becoming more tentative.
- Desperate shortage of experienced lawyers means that we and other firms are turning good work away.
- Legal services - really busy, lots of work coming in. We expect to be busy for some time. Our major constraint is finding quality staff to do the work.
- Legal: Business is good, but for the wrong reasons in terms of the economy. Tax reform is a constant issue, with many clients believing that the Budget and the recent discussion paper on the taxation of investment income represent missed opportunities and a lack of understanding of what business and investors really need.
- Legal services in commercial sector. Noticeable turndown in activity, particularly property, as astute investors realise gains from current low rental yields and take the opportunity to off-load to an eager market. I suspect many are waiting for counter-cyclic buying opportunities in the next year or so as the gloss comes off the property market.
- Nelson Legal---expansionary mood seems to have evaporated on difficult times for fishing, forestry & horticulture. Is dichotomy between business & consumer confidence something about businesses being exposed to floating interest rates more than consumers?
- Rising input costs at greater than inflation, and narrow revenue methods (rates) (Local Government)
- Import speciality lubricant products, will be hit by both increased costs due to int. oil prices and lower NZ$, looking at price increases of 30% and a receding market. Gov’t compliance takes up far too much time at too much cost, if this could be trimmed by 80%, more effort could be made in sales, training and expansion.
- No reduction in orders so far but we are always looking for new opportunities to grow or replace any drop off with new work.
- Manufacture of building materials - residential easing, commercial and infrastructure strong.
- NZD still above costed levels.
- Export manufacturing - sales looking light but with the dollar falling should off set this - Things have picked up in the last 2 months from the start of the year which has been dismal.
- Manufacturing & Retail. While outlook for work is good, competition is intense and the ability to control costs particularly increasing wages and flow on affect of oil prices. Also difficult to find and lease Retail Sites with reasonable rents.
- Furniture manufacturer and retailer. Things have come almost to a complete hold.
- Clothing Manufacturer. The rag trade suffers from the weather as well as the economy and winter trade has been poor due to insufficient or late arrival of cold weather.< The strength of the dollar has also sent more makers overseas for their production and this continues to whittle down the infrastructure and staff skills in our industry.
- We are paint manufacturers and already the slowing house market is making its lack of presence felt.
Collections have been very slow this month and difficult to negotiate.
- Supplier to the furniture industry – expect sales to improve though margins to remain tight.
- Textile manufacturing - we are under pressure from Chinese made garments which are produced at significantly less cost than we are able to in NZ - We pay pretty good rates but are finding it more difficult to attract labour to work in the factory.
- Slowing down, less forward orders, retailers say they have high stocks and wish to reduce this stock before buying more.
- Textile and Garment Industry. In a word is Fragile. China continues to impact heavily on local manufacturers aided by the strong Kiwi Dollar. Seasonal Weather patterns always have an effect; for good or bad. The very mild lead into winter this year, in both Australia and N.Z. has resulted in lower retail sales and this will ultimately affect manufacturer sales for winter 2006.
- Industrial Label Manufacture - Order level still the same as last year but customer confidence not strong.
- We are a manufacturing exporter with exposure to the USD, finally a little relief beginning to appear with the fall in the USD.
- Going quieter in a lot of areas. Hard to compete against China.
- Boat Building - The change in the NZD is exciting. Already it is making a difference to our pricing off shore and our competitors pricing in NZ. However I believe the public are in a wait a see mode, so aren’t willing to commit to large luxury purchases.
- Things are going well - business holding up better than expected. Changes in the retail business environment, e.g. acquisition of Progressive Enterprises by Woolworths Australia will generate additional business in the short run. Public Enterprise sector is still generating growth. Staffing remains an issue - good people hard to attract and retain.
- There’s a definite shortage of labour: it’s especially difficult to recruit experienced, professional staff (information research industry)
- Is looking quite good with the dollar declining.
- Meat processing. Falling NZ $ helpful. However note there is a lot business in Euro & currencies other than US. So gains are mixed. Issues with Environment Agencies are extensive and expensive fixes.
- Underpaid, huge turnover of professionals, chronic shortage of psychiatrists, psychologists, mental health nurses, occupational therapists etc. Professionals moving overseas for financial gain and a better career pathway.
- Electrical/Manufacturing/Building. After a very slow Jan to March (I think that the industry enjoyed the summer rather than working) we seem to be at close to record levels. It also appears the freight companies are busy as well - always a good indicator
- Rationalization is trying to take place. It is needed but hesitancy is showing through. However the import worm is really turning aggressive, here and in Australia. Investment in NZ is hesitant. This will impact negatively on our industry.
- I am in the paint industry covering manufacture, distribution & retail. My view is with the building boom now in the past there will be consolidation in the trade paint industry (painting professionals) and a downturn in the retail sector.
- Currently a poor overall outlook for returns remains for 2-3 years ahead. Oversupply and marketing concerns are additionally impacted by new storage technologies. And compounded by the ordinary relative quality of NZ fruit, which is no longer a leading standard and inadequately differentiated. High relative value of NZD and NZ industry fragmentation, and lack of coordination and a commonality of focus, and standards are also big issues.
Printing & Publishing
- Printing Industry in Wellington is ok as we reply to this and has been for a couple of years now.
- Publishing business. Current advertising remains strong, but forward bookings are weak. In my experience people book advertising in advance when they expect better conditions. Fewer forward bookings mean they’re expecting a slow-down. Mind you, it’s been this way for six months now and the ACTUAL slow down hasn’t eventuated.
Quick Service Restaurants (QSR)
- Sales are strong and building, all eyes are on the school holidays.
- Very bad and declining at an alarming rate. Election is the biggest issue
Real Estate – Commercial
- Commercial Retail Leasing: An oversupply of retail space in Christchurch is now starting to show up in significant vacancies which in time will have a downward pressure on retail rents. With the substantial expansion of the Christchurch suburban malls Christchurch now has the largest area of retail space per head of population of anywhere in New Zealand. (Note from Tony A. – can confirm this with some notable groupings of vacancies in the ChCh inner city area seen on walk around this week.)
- Commercial property - In a highly speculative and dangerously overheated phase now. Has its own illogical momentum which is not supported by local economic fundamentals.
- Auckland - Industrial market strong, good demand from both tenants and buyers
- Long term property investment. Buoyant for small shops, office renting slow, industrial strong - Auckland
Real Estate – Residential
- I sell real estate in the Queenstown market and have been here for some time. Realistically in the residential market $500,000 to $700,000 there will be some quite significant price reductions. Primarily, the market has got ahead of the ability of the purchaser to afford the property. However, those houses around the $400,000 mark and less will always sell quickly while those properties in the millions will find a buyer no matter what the economic market, providing of course they are premium properties.
- Central Auckland. Market remains steady in both volume and value.
- Has levelled in Chch. Still good prices but much less activity.
- Listings are slowing but there are still plenty of eager buyers around. Lack of stock, plenty of buyers - means it’s a good time to be selling and prices are holding well.
- Rental property. In Hamilton purchase prices seem to be dropping relative to rental expectations.
Reportedly less purchaser interest. Tenants are fewer and more particular.
- Re Queenstown. Price reductions to sell as Vendors start to chase the market down.
- Almost totally stagnant - and not looking confident for post election promises to be broken.
- I am in the Residential Property Management business Nelson. Demand for rentals are at their winter lows but do not have many vacancies. Increased social handouts are holding up the bottom of the market. The middle and upper is struggling. Have just looked at a 2 Brm for sale. Listed January $220,000 now $170,000. Rent unchanged.
- Residential Real Estate (I am a RE Trader) Hamilton market seems to be holding up well with more buyers than sellers . However listings are way down still . It will be very interesting to see what happens once the traditional spring surge comes on - I feel that prices are too high & once there are more sellers than buyers - one economic scare will have a dramatic affect.
- Still very high buyer demand -any properties around $200,000 sell very rapidly. Investors still accepting 6% return on residential. Prices holding up.
- Residential Real Estate Auckland Inner Eastern Suburbs - Listing and sale levels quite similar to most recent winters. Gaps between vendors and buyers increasingly obvious. Auction remains a good way to sell a home, but like all other methods of sale, auctions depend on realistic pricing. Vendors reading this, if you really want to sell, don’t get greedy....get real!
- Residential Real Estate - Vendors in St Heliers/Kohi/Mission Bay starting to address expectations and prices moving downwards to achieve sales.
- Real Estate Agency Christchurch. Market lacking previous urgency but seasonal low anyway, short of listings, buyers cautious. All will be revealed in the spring market! - Desperation and panic all gone from the residential property market. Buyers now have a lot more negotiating power and the smart buyers are prepared to use it. Unsatisfiable demand for good commercial investment property. Property market Dunedin.
- I’m in the property market in Chch, buying and selling "quick flicks" and so far so good. Aiming in the lower price bracket however I do expect it to be a tad more competitive. So far so good.
- Property. Have found the high end of Auckland property market to have slowed considerably when compared to 12 months ago.
- BOP residential investment properties show no sign at all of easing.
- Property Development: people want to buy and to invest still - in year perhaps there may be a decline.
But not if there is another immigration surge... we’ll see.
- Bit flat at the moment but not abnormal for time of year. Indications are for a positive pickup from early Sept. Prices have levelled but certainly not gone down and showing no signs of doing so. Here’s to a fantastic 2006!
- Residential Valuations Auckland. Work has slowed down with the volume of sales and requests for valuations significantly less than three months ago. Real Estate salespeople report a number of buyers but limited stock and purchasers looking for well priced property, however when these become available then a number of these attract multi offers.
- Prices appear to be falling slightly but I believe the market got overheated. I don’t believe there will be a crash just a market correction.
- Property Development: Slowing down in residential buying interest evidenced of late. More price sensitivity rather than lack of interest in actual buying. But still moderate interest in high end market units such as penthouses etc. Still good demand for Commercial/retail property. Contractors becoming more readily available and more price negotiability/flexibility apparent.
- Property development - Auck CBD apartments over supplied and rents sliding. Construction costs escalating making it difficult to stack up projects in the apartment market. Probably a good thing given the over supply.
- Pretty quiet, very cautious buyers, vendors with high expectations
- lots of people around trying to buy...just not enough listings out there!.....when the market slows down - the sellers AND buyers just have to adjust their expectations - become more realistic and then everyone is able to move on with their lives....
- Expect things to remain pretty much the same as they are now - average.
- Residential rentals. Hopefully should be ok.
- New residential landlord. Has something happened to the Akld cbd rental situation or what? Where have all the tenants gone? Or rather, where have all the extra apartments come from? Many vacant apartments and I’m struggling to fill mine. Dropped the rent from $450pw to 400 to 350 and now 300.
Bingo. Found a tenant. Is this a sign of things to come?
- People still lining up to buy properties when they come available with the buyers showing keen interest, and most of them at realistic offers. Still some hesitant (non urgent) sellers thinking that they can get a better price if they wait and put it on the market later! Those selling now are getting good prices due to the high number of prospective buyers on the market. These buyers could all be gone later in the year, having already bought a property!
- Residential property investor. Rents are rising in the provincial towns I invest in and in areas of south Auckland. There is a persistent shortage of properties to rent in many provincial towns.
- We are in the property advisory business and while things are still very busy, it seems that there are more negative influences around than say three months ago. And why would there not be with such an uncharacteristically long run in the market and now higher interest rates. Demand though is still very strong, but it seems that people are being quite sensible about buying decisions.
- Still a demand for properties and still have more buyers than listings. Still have good opportunities in sales and even though the homes are not being sold as quickly as a year ago, there is still a greater demand than supply and so I am still optimistic in the profession.
Real Estate – Rural
- Rural Real Estate Cambridge... Given a change of government or status quo, the tide is turning and purchasers are taking over the reigns from vendors. We are entering into a buyers market as this heated market dissipates somewhat, causing prices to flatten or ease.
- Supplier to Aged Residential Care Industry (Rest Homes & aged care hospitals). This industry is severely depressed by Govt Policy. Operators are either selling up (Church groups etc) or deferring much needed redevelopment or refurbishment plans. This industry is in crisis. As a supplier this is bad for our business.
- Retail - (Christchurch 2 x shops)Natural Health : June was a record month. Wholesale (National Coverage) June was a great month and in our top 5 of all time. Group size 2 x shops plus 1 wholesale = sales $3.5m.
- Food retailing. Situation quite steady, recent growth has been moderate. Any inflation of prices due to exchange rate drop actually increases sales dollars! This may eventually happen but not for a few months, and not in a major way.
- Very tight. Credit squeeze on customers in the near future.
- At retail and consequently also at wholesale there is a slow down in purchase of expensive fruit/produce i.e. grapes, pineapples etc and increase more ordinary fruit - apples and bananas
- Business has definitely slowed, we’re in furniture retail.
- Fuel retail/convenience. Fuel price becoming a talking point, however biggest issue is retaining & recruiting suitable staff.
- Less numbers through the door compared to this time last year. Higher conversion rate however. Net result is that turnover is down a little though.
- Top end retail. Dead! Absolutely dead. About to reduce staff hours in lieu of letting someone go. 4 term year was the worse thing that ever happened to this sector of retail. (Ed. Note – don’t know what they mean by 4 year term.)
- Furniture retail well down on last year despite colder weather which normally kicks off the busy season.
- Lingerie importing. Current forward orders thru to Xmas are excellent however over the last month retail has gone extremely quiet. Dept stores are usually a good measure of confidence for us and they are all showing nil to minus growth
- & other related products. Sales during the last three months were better than expected and there has been no sign of change in July. It seems everyone is more safety and environmentally conscious and that will be good for us all.
- Significant easing in demand for product both domestically and Australia, certainly well beyond any seasonal pattern. A little relief with the NZD finally starting to sag.
- Sawmilling continues to be difficult, low prices, high dollar, labour shortages, Carbon Tax reducing forested area, RMA etc.
- This is always a growth industry with some supply companies reporting growth rates of up to 40%. This probably occurs when new "breakthrough" type technology products are released coupled with clever, focused marketing.
- (not exporter, vessel operator) Volumes remain reasonably buoyant, freight rates generally rising to cover high charter costs due to a shortage of global capacity. New vessels built soon (2006) should move the market to over capacity reducing charter rates. Cost relief on USD denominated fuel, charter, container leasing, insurance costs. Lower profitabilities then expected from weakening currency, and weaker regional economies(NZ, Australia, South Pacific)affecting volumes moved.
- No significant change foreseen for the next 6 months from what has happened in the last 6 months.
Continuing complex mix of competition and regulation. Price a big factor in winning customers.
- Looking to be worse as prices eroding further for toll and broadband difficult to meet sales targets uncooperative relationships with most telco partners not improving markedly
- is suffering from slightly weaker demand in NZ as well as export markets in Australia and UK.
- Inbound. Not much happening after the Lions Supporters leave.
- Things are still looking positive and looking forward to a busy summer.
- Quieter than usual.
- Tourism has slowed but still above levels in 2003-2004.
- It is our low season with tourism, however the lodge near us is fairly busy - depends on type of accommodation.
- Tourists on holiday and visiting friends are down while business visitors are up giving the impression of increasing tourists. Less per head being spent by tourists.
- Tourism/Backpacking; strong month for June 5% up on last year. But Auckland goes against trend -huge increase in beds there and occupancy lower.
- We have a daily distribution business and freight costs are now having a serious affect. We also have a processing business in the South Island and freight increases for getting the product north mean it will be shut down within a year.
- Road Transport. - We are sitting on an unknown future fuel cost which when combined with Govt’s bungling of Carbon tax issues creates extreme industry uncertainty for positive predictions.
- New Vehicle Industry ahead of last year and heading for the highest volume since 1990.
- Although sales and revenue are increasing margins are under pressure and expenses are increasing - Wholesale cars. Selling cars is hard work at the moment. We feel it is a combination of the slowing economy, increased competition in Japan (sourcing imports) and alternative selling methods (trademe).
We do have a positive outlook however because it can’t get much worse!
- Used car dealer Hawkes Bay. Last six weeks good sales.
- Used Vehicle Sales, most difficult period in the last six years. Very low enquiry very high pressure on prices as a result. Oversupply of product in the country and too many operators getting a decreasing percentage of the available business.
- Overdone - bad harvest in a lot of areas. I believe an over supply for the export market and a declining volume of wine being consumed by NZers.
- NZ dollar is pushing up the price points of NZ
wine to a position where there is little or no margin left
in the business for us. We can only hope as the dollar
retreats that we can restore some margin , but we
think that most of the margin we lost as the dollar went up and had to surrender during it’s rise, we will not recover.
- Grape Growing - some small relief I would say that the exchange rate may actually be on the turn & a bit of the heat coming out of the economy. Grapes are one commodity that definitely hasn’t been sitting on historical highs recently & the exchange rate backing off should be overall positive for growers both for domestic market & export, if indeed it continues. FX market sentiment is such a fickle thing!
The BNZ Confidence Survey is run on the first Thursday of each month. In the Weekly Overview email sent to the 8,000 non- BNZ email addresses on our database respondents are asked to click on a URL which takes them to a survey site.
Respondents are asked if they feel the economy will get Better, Worse or stay the Same over the next 12 months.
Respondents may also make comments if they wish. Results are collated each Tuesday and released that night in this publication to media and WO readers.
This publication has been provided for general information only. Although every effort has been made to ensure this publication is accurate the contents should not be relied upon or used as a basis for entering into any products described in this publication. BNZ strongly recommends that readers seek independent legal/financial advice prior to acting in relation to any of the matters discussed in this publication. Neither the Bank of New Zealand nor any person involved in this publication accepts any liability for any loss or damage whatsoever that may directly or indirectly result from any advice, opinion, information, representation or omission, whether negligent or otherwise, contained in this publication.