Businesses realistic, confident about own prospect
Embargoed until 1am
19 October 1999
Businesses realistic, confident about own prospects
Treasurer Bill English said the easing in business confidence in the September quarter, reported in the NZIER's Quarterly Survey of Business Opinion (QSBO), was not unexpected.
"Business confidence has continued to edge down from the unsustainably high levels recorded at the beginning of the year. The strong readings earlier in the year were out of line with expectations about the economy's growth prospects. Confidence levels are now at more realistic levels and are consistent with solid growth in the economy.
"The survey also showed that firms are more optimistic about their own prospects than they are for the economy as a whole. This has been a common feature of confidence surveys over the past six months.
"A net 18% of firms expect the general business situation to improve over the next six months. But a far greater number - 30% - expect their own business to improve. Firm's expectations of their own business have remained steady since the beginning of the year.
"The QSBO also showed that underlying economic activity has continued to improve, providing further evidence that the economy has strengthened from the weak June quarter. Firms reported robust growth in activity in the September quarter from June. This pick-up was strongest in the manufacturing and building sectors. And firms expect their own activity to pick-up further in the December quarter.
"In line with this confidence in their own prospects, firms are becoming more optimistic about their own profitability and are indicating that they intend to take on staff," said Mr English.