Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Election jitters start to impact NZ business confidence

Election jitters start to impact NZ business confidence; Australia closes gap


Election jitters in New Zealand boardrooms and a hard-hitting Australian budget have seen the gap in business confidence levels between the two countries narrow sharply over the last three months.

New Zealand business confidence for the next 12 months has dropped 18%, from 88% in first quarter of this year to 70%, while Australia’s has rebounded from 36% to 50%, according to the Grant Thornton International Business Report (IBR) which surveyed businesses in 34 economies. New Zealand confidence levels have been higher than Australia since 2011.

Mark Hucklesby, Partner and National Technical Director, Audit, for Grant Thornton New Zealand said the shadow of the elections is definitely starting to fall on New Zealand businesses.

“I have been in several boardrooms over the last few weeks where the impact of the elections has been discussed. It’s clear that the offshore customers of many New Zealand businesses are seeking views on the likely outcome of our pending election.

“One thing that these offshore customers want is stability. Even though the National Party has a strong majority, the quirks of MMP leave overseas business leaders with a sense of unease which in turn dents confidence among New Zealand business.

“This survey was conducted before the Reserve Bank’s latest interest rate rise and I suspect this move has probably further eroded confidence levels given its impact on exchange rates,” he said.

Hucklesby said that despite the drop in confidence levels, New Zealand is still ranked sixth in the world, one place lower than last quarter. India (86%), Ireland (84%), United Kingdom (80%), Germany (79%) and the United States (74%) are ahead of us.

“This is still a very good ranking. If you look at the rise in confidence throughout the rest of the world, especially in Australia where business confidence has climbed to its highest level since 2010, then there is no reason to think that the New Zealand economy will not continue to perform strongly.

“The influence of Australia on New Zealand cannot be underestimated. They are still our second biggest trading partner after China and a buoyant economy in Australia is beneficial to New Zealand. Australia’s strong business performance through the Global Financial Crisis and the fact they did not slip into recession was a real positive for this country.

“I firmly believe that the ruthless budget delivered mid-May in Australia helped their business confidence level. They knew that something drastic had to be done and the budget delivered some tough measures. Also, one should not forget that while their budget figures aren’t great, their economy is still ticking over strongly. Good growth figures coming out of India and China have also helped Australia,” he said.
ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Reserve Bank: Wheeler Keeps OCR At 1.75%

Reserve Bank governor Graeme Wheeler kept the official cash rate unchanged at 1.75 percent, as expected, and reiterated his view that the benchmark rate doesn't need shifting for the foreseeable future. More>>

ALSO:

Retail: Pumpkin Patch Brand, IP Sold To Catch Group

The receivers of failed children's clothing retailer Pumpkin Patch have confirmed that the company's brand and intellectual property have been sold to Australian online retailer Catch Group. More>>

ALSO:

Oil: 2017 Block Offer Petroleum Tender Launched

New Zealand is well-placed to take advantage of the economic benefits of oil and gas exploration, Energy and Resources Minister Judith Collins announced today at the launch of the 2017 Block Offer petroleum tender. More>>

ALSO:

OECD And Zero Carbon Reports: Environmental Pressures Rising In New Zealand

New Zealanders enjoy a high environmental quality of life and access to pristine wilderness. However, New Zealand’s growth model, based largely on exploiting natural resources, is starting to show its environmental limits with increasing greenhouse gas emissions and water pollution ... More>>

ALSO:

Statistics: Record Net Annual Migration Levels Continue

In the February 2017 year, 71,300 more migrants arrived in New Zealand than left, Stats NZ said today. This equalled the previous annual record set in January 2017. More>>

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news