Sharechat Logo

Business confidence improved in October but remains mired in gloom

Thursday 31st October 2019

Text too small?

Business confidence improved in October but remains deeply negative and firms' optimism about their own activity continues to fall.

A net 42.4 percent of the 412 respondents surveyed by ANZ Bank expect general business conditions will deteriorate during the coming year, down from 53.5 percent in September. 

However, firms' optimism about their own activity also fell, with a net 3.5 percent now expecting things to get worse, compared with the net 1.8 percent who were negative in the September survey. It was the fifth fall in a row and the lowest since April 2009. However, it was well above the recession low of negative 21 percent, ANZ Bank said. 

ANZ chief economist Sharon Zollner said the data was a mixed bag but "it appears that the activity indicators are generally finding a floor, in that we saw a mix of rises and falls across the other activity questions. She noted employment intentions were down but investment intentions were up.

Employment intentions improved by 1.6 points to a net 9.4 percent now expecting to reduce head count.

Investment intentions, however, improved 3.4 points to a net 5.5 percent expecting to reduce investment. Profit expectations improved by 3.3 points to a net 21.2 percent expecting profitability to decline.

Pricing intentions, meanwhile, rose 5.6 points to a net 23.6 percent of firms expecting to raise prices. Cost pressures rose 1.1 points to 48.4 percent expecting higher costs but inflation expectations were largely unchanged at 1.62 percent. 

The retail sector remains the most downbeat with the weakest own activity, profits and employment readings and the highest expected cost pressure.  

Zollner noted, however, things seem to be looking up for the construction sector although firms still expect to cut staff. 

"All up, we’d take the mixed signals out of this month’s survey as a positive sign, as it interrupts a deteriorating trend. It’s a start," said Zollner.

(BusinessDesk)



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

12th November 2019 Morning Report
MARKET CLOSE: NZ shares gain, retirement villages buoyed by Auckland housing market bounce
NZ dollar rises, shrugging off US-China trade war woes
Long-serving ACC investment chief calls it a day
Institutional investors continue to shun Fonterra
Card spending stalls; dearer petrol crowds out other goods
Abano directors cave to takeover by scheme of arrangement
Fletcher dismisses subcontractor claims as vague
11th November 2019 Morning Report
Odds favour a rate cut but it's a line ball call

IRG See IRG research reports