NZ business confidence falls for first time in five months amid global uncertainty
Aug. 31 (BusinessDesk) – New Zealand business confidence fell for the first time in five months, with firms showing more caution in the face of global financial market turmoil, trimming expectations for exports, profits, pricing and hiring.
The National Bank Business Outlook survey showed a net 34.4% of businesses expect better times ahead for the economy as a whole, down from a net 48% in last month’s survey. Firms’ view of the economy has dimmed even though they’re still upbeat about their own prospects, with a net 43.3% seeing better times ahead, barely changed from the July survey.
Given the “tumultuous” period across global markets in August “we are not surprised to see greater caution evident in local business sentiment,” said Cameron Bagrie, National Bank chief economist.
The monthly survey was released at the same time as the New Zealand Institute of Economic Research’s quarterly predictions report, which forecasts economic growth of just 1.4% this calendar year, and 2.6% in 2012 as households repay debt and hold off on spending. That’s softer than the Reserve Bank’s June forecasts, which were picking growth of 2.8% and 4.7% respectively.
A net 18.5% of those firmed polled in the NBNZ survey expect exports to rise in the next 12 months, down from a net 31% in last month’s survey. Investment intentions slipped to a net 12.3% from 17.9%.
Residential construction got a slightly stronger reading at 48.3% from a net 41.9% last month while for commercial construction, the latest reading of 27.% weakened from 32.4% in July.
A net 9.1% of those surveyed expect to hire workers in the next 12 months, down from a net18.9% in last month’s survey. Those expecting bigger profits fell to a net 15.6% from 23.9%.
A net 81.9% expect interest rates to rise in the coming year, a leap from July’s reading of 59.2%.
A net 20.5% expect to raise prices over the next 12 months, down from 29% last month, yet inflation expectations rose to 3.45% from 3.15%.