NZ business confidence slips as firms ‘wait and see’
Dec. 16 (BusinessDesk) – New Zealand business confidence slipped this month as the stalling economic recovery makes businesses cautious committing to new activity.
A net 29.5% of respondents are expecting better times ahead this month, down from a net 33.2% in November, according to the latest National Bank Business Outlook.
Companies’ expectations for their own activity slipped to a net positive 34.5% this month, from 35.3% in November.
“There are still enough factors to keep businesses cautious about prospects, hence the failure to kick-on and see the improving trend in confidence over October and November extend into December,” said chief economist Cameron Bagrie in his report.
Firms have “waited and waited and are still not sure what they see.”
New Zealand’s economic recovery took a knock in the second half of this year as households focused on repaying debt rather than ramping up spending, forcing the Reserve Bank to delay hiking interest rates from very stimulatory levels.
The survey shows more businesses are expecting to boost exports over the coming 12 months, with intentions climbing to 24.3% from 20.8% in November.
Expected profits slipped to 14.8% from 15.4% last month, while investment rose to 8.3% from 6.6%.
Hiring intentions improved this month, with a net 12.5% expecting to take on new staff in the coming year compared to 11.5% in November, while pricing intentions rose to a net 21.6% of respondents predicting higher prices, compared to 17.7% last month.
Ease of credit rose to 11.8% from 10.7%, while inflation expectations were little changed at 2.84% from 2.86% last month.
Bagrie said retailing and manufacturing sectors showed an improvement in sentiment this month, though agriculture, construction and services declined.