Economic confidence tumbles in BNZ survey

Monday 7th March 2011

Confidence in the economy fell to a two-year low following the Christchurch earthquake last month, as measured in a monthly BNZ survey.

A net 20% of the 456 respondents to the survey indicated they expected the economy to get worse in the coming year, BNZ chief economist Tony Alexander said today.

That compared to a net 22% expecting improvement in early February and 35% net positive sentiment a year ago.

About 68 of 349 submitted comments had mentioned the earthquake, and some were in terms of higher business activity due to the refugee effect, or immediate recovery and emergency reconstruction effect.

"Therefore one may be able to run an argument that without the earthquake the sentiment reading may well have declined anyway though there is no way of proving this," Alexander said.

"Perhaps the earthquake has merely crushed hopes many businesses had been expressing in recent months regarding the future even though comments about current conditions for many months have been overwhelmingly negative."

Despite the dour tone, sentiment was positive regarding current business conditions in forestry, information technology, recruitment and farming.

NZPA

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