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


NZ business confidence falls from 20-year high in 2Q

NZ business confidence falls from 20-year high in 2Q as growth moderates

By Tina Morrison

July 8 (BusinessDesk) - New Zealand business confidence declined from a 20-year high in the second quarter as economic growth moderates.

A net 33 percent of businesses were optimistic in the June quarter, seasonally adjusted, from a net 51 percent in the first quarter, according to the New Zealand Institute of Economic Research’s Quarterly Survey of Business Opinion. The New Zealand dollar dipped to 87.38 US cents from 87.49 cents immediately before the release.

The survey showed a net 31 percent of firms expect improved economic conditions in the quarter ahead, down from a net 35 percent in the previous quarter, while a net 15 percent experienced a pick up in activity in the second quarter, down from 24 percent in the first quarter. The survey is consistent with growth moderating from strong levels, with annual gross domestic product moderating to 2.8 percent in the second quarter from 3.8 percent in the first quarter, the NZIER said.

“Things are still pretty good but the momentum is coming off,” said Shamubeel Eaqub, principal economist at the NZIER. “The economy is still growing but the pace of growth may be starting to come off a wee bit.”

Costs pressures are constrained and are likely to remain so for the foreseeable future, Eaqub said. However capacity pressures are starting to come through and prices are beginning to rise with consumer price inflation heading towards 2.5 percent by the end of this year, he said.

Firms reporting a rise in average costs edged up to a net 20 percent from a net 19 percent in the first quarter while a net 23 percent experienced price rises, up from a net 16 percent in the first quarter.

The survey comes as the Reserve Bank is expected to raise the benchmark interest rate this month, following three rises this year. Eaqub said he doesn’t think the bank should raise rates any further.

“We should hold here to see what is happening with the economy,” he said.

A net 93 percent of financial services firms expect interest rates to rise, up from a net 87 percent in the previous survey.

Those firms seeing profit growth eased in the latest quarter, to a negative 4 percent from positive 3 percent in the previous quarter, as sales volumes slowed.

The survey showed capacity pressures building, with capacity utilisation increasing to a net 90.6 percent from 89.4 percent in the previous quarter. The NZIER said the pressures were most acute for builders and those facing the domestic economy, rather than exporters.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Postnatal Depression: 'The Thief That Steals Motherhood' - Alison McCulloch

Post-natal depression is a sly and cruel illness, described by one expert as ‘the thief that steals motherhood’, it creeps up on its victims, hiding behind the stress and exhaustion of being a new parent, catching many women unaware and unprepared. More>>


DIY: Kiwi Ingenuity And Masking Tape Saves Chick

Kiwi ingenuity and masking tape has saved a Kiwi chick after its egg was badly damaged endangering the chick's life. The egg was delivered to Kiwi Encounter at Rainbow Springs in Rotorua 14 days ago by a DOC worker with a large hole in its shell and against all odds has just successfully hatched. More>>


Trade: Key To Lead Mission To India; ASEAN FTA Review Announced

Prime Minister John Key will lead a trade delegation to India next week, saying the pursuit of a free trade agreement with the protectionist giant is "the primary reason we're going" but playing down the likelihood of early progress. More>>



MYOB: Digital Signatures Go Live

From today, Inland Revenue will begin accepting “digital signatures”, saving businesses and their accountants a huge amount of administration time and further reducing the need for pen and paper in the workplace. More>>

Oil Searches: Norway's Statoil Quits Reinga Basin

Statoil, the Norwegian state-owned oil company, has given up oil and gas exploration in Northland's Reinga Basin, saying the probably of a find was 'too low'. More>>


Modern Living: Auckland Development Blowouts Reminiscent Of Run Up To GFC

The collapse of property developments in Auckland is "almost groundhog day" to the run-up of the global financial crisis in 2007/2008 as banks refuse to fund projects due to blowouts in construction and labour costs, says John Kensington, the author of KPMG's Financial Institutions Performance Survey. More>>


Health: New Zealand's First ‘No Sugary Drinks’ Logo Unveiled

New Zealand’s first “no sugary drinks logo” has been unveiled at an event in Wellington... It will empower communities around New Zealand to lift their health and wellbeing and send a clear message about the damage caused by too much sugar in our diets. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news