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


Firms' own activity outlook continues to improve

Australia Economic Research
New Zealand: firms' own activity outlook continues to improve

The headline reading on the NBNZ business confidence survey fell in December from 43.4 to 38.5, marking the third straight monthly decline. We had expected a modest rise in the headline given that, since the last NBNZ survey, the domestic economic data have been mildly positive. News from offshore also has been generally more upbeat, with the US non-farm payrolls report, in particular, showing an unexpected drop in the US unemployment rate and “only” a small drop in non-farm payrolls.

The all important firms’ own activity outlook improved in December, however, rising to 36.9 from 33.7. This supports our view that the Kiwi economy will continue to expand in coming quarters (chart).

Despite the weaker reading on the headline measure of business confidence, the details of the survey appeared mildly more upbeat. A larger portion of those surveyed expected that investment (a net 10%) and profits (a net 16%) would improve. The employment outlook also was looking better, with a net 6% of those surveyed expecting employment to increase over the next 12 months, and “only” 29% expecting the unemployment rate to rise. Even the outlook for the construction sector is looking up (finally), with a net 63% of those surveyed expecting residential construction to pick up over the next year, and a net 25% expecting some improvement in commercial construction.

The survey also showed that 69% of firms expect the RBNZ to hike the cash rate in the next year, compared to 73% in November. This was a little surprising given the RBNZ shifted to a tightening bias, from an implied neutral stance, at the last OCR announcement in early December. Indeed, following the OCR statement earlier this month, we changed our OCR call. We now expect the RBNZ to kick-off the next tightening cycle in March with a 25bp rate hike. Previously, we expected that the RBNZ would delay the first rate hike until July 2010 and start with a 50bp move but, given the earlier start, a 25bp move should suffice. Financial conditions also have tightened, owing to stronger NZD, increased long-term interest rates, and elevated bank funding costs, which is doing some of the heavy lifting for the RBNZ.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Snail's Pace: Aucklanders Face Frustrating Commute Over Harbour Bridge

Journeys into Auckland's CBD took longer than usual as traffic banked up around the damaged Harbour Bridge. More>>


Statistics New Zealand: COVID-19 Sees Record 12.2 Percent Fall In New Zealand’s Economy

Gross domestic product (GDP) fell by 12.2 percent in the June 2020 quarter, the largest quarterly fall recorded since the current series began in 1987, as the COVID-19 restrictions in place through the quarter impacted economic activity, Stats NZ said ... More>>


Climate: Scientists Release ‘Blueprint’ To Save Critical Ecosystems And Stabilize The Earth’s Climate

A group of scientists and experts produced the first comprehensive global-scale analysis of terrestrial areas essential for biodiversity and climate resilience, totaling 50.4% of the Earth's land. The report was published in Science Advances ... More>>


MPI: Independent Review Launched Into Assurances For Safe Transport Of Livestock By Sea

The Ministry for Primary Industries (MPI) has launched an independent review of the assurances it receives for the safe transport of livestock by sea. MPI Director-General Ray Smith says Mike Heron QC has been appointed to lead the review, which is expected ... More>>


Computers: New Zealand PC Market Grows Nearly 40% Due To Work From Home Demand

COVID-19 had large impacts on demand for PCs as businesses prepared for lockdowns by purchasing notebooks to mobilise their workforce. In the second quarter of 2020, New Zealand's Traditional PC market experienced a 39.7% year-on-year (YoY) growth ... More>>


Ministry of Health: Public Transport Distancing Requirements Relaxed

Physical distancing requirements on public transport have been reviewed by the Ministry of Health to determine whether they are still required at Alert Level 2 (or below). The Ministry’s assessment is that mandatory face covering and individuals tracking ... More>>


NZHIA: New Zealand Hemp Industry Set To Generate $2 Billion Per Annum And Create 20,000 Jobs

A new report says a fully enabled hemp industry could generate $2 billion in income for New Zealand by 2030, while also creating thousands of new jobs. Written by industry strategist Dr Nick Marsh, the report has prompted calls from the New Zealand Hemp ... More>>


Stats NZ: One In 14 Employed People Report High Risk Of Losing Jobs

About one in 14 workers say they expect to lose their job or business by mid-2021, Stats NZ said today. A survey of employed people in the June 2020 quarter showed 7 percent felt there was a high or almost certain chance of losing their job or business ... More>>

ASB Quarterly Economic Forecast: NZ Economy Doing Better Than Expected, But Challenges Remain

August lockdown estimated to have shaved 8% off NZ’s weekly GDP, and 0.5% off annual GDP Economy now expected to shrink 5% (year-on-year) by end of 2020 Unemployment rate now expected to peak at 7.2% The latest ASB Quarterly Economic Forecast is less ... More>>


SAFE: Live Export Ship Carrying 5,800 New Zealand Cows Goes Missing In East China Sea

Livestock carrier Gulf Livestock 1 sent a distress signal at 4:45am NZT yesterday in the East China Sea. The area is affected by Typhoon Maysak. At 4pm a patrol plane spotted a lifeboat - with no people in it - and a man in lifejacket nearby. The ship ... More>>


FMA: Kiwisaver Fees Don't Match Performance

The Financial Markets Authority (FMA) today published an independent report into the passive and active investment management styles [i] used by KiwiSaver providers. The FMA commissioned MyFiduciary to test the extent that KiwiSaver providers were ... More>>