Business confidence little changed in National Bank survey

Thursday 16th December 2010

Business confidence turned down slightly in the December National Bank Business Outlook survey which also recorded a sharp fall in residential investment intentions.

A net 30% of businesses expect better times for the economy in the coming year, down three points from last month. The activity expectations of firms were unchanged with a net 35% expecting better times for their own businesses in the year ahead.

Employment intentions rose from plus 12 to plus 13 and investment intentions rose from plus seven to plus eight.

But a mere 3% of people expect the outlook for residential investment to be better over the coming year, down 28 points on last month.

"Confidence has merely stabilised around mid-year levels after a September quarter lull. The housing market remains the key dinner table bellwether insofar as the feel-good factor is concerned, and is lagging behind momentum across the general economy," the report said.

Respondents appeared to be taking a wait and see attitude before committing cold hard cash to capital expenditure, the report said.

A net 15% of firms expect profits to rise during the coming year and pricing intentions have lifted four points from last month. The lift in pricing intentions was not enough to flag an inflationary undercurrent, meaning interest rates may be low for a considerable time.

NZPA

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