Sharechat Logo

Business confidence lifts, survey finds

NZPA

Thursday 30th June 2011

Text too small?

Business confidence as measured by the National Bank's monthly survey lifted further in May but other indicators generally failed to follow the improving trend.

A net 47 percent of respondents to the business outlook survey expect general business conditions to improve in 12 month’s time, up nine points on May.

The other indicators generally stabilised around last month's readings.

National Bank chief economist Cameron Bagrie said the composite indicator, which included firms’ own activity expectations, employment and investment intentions, was flagging 4-1/2 percent growth.

"We can detect a strong rural flavour coming through the results with the likes of Waikato strong across various measures in the survey," Bagrie said.

While earthquake-hit Canterbury remained the most optimistic region according to general business confidence, with a net 60 percent expecting improvement, such exuberance was not flowing through into other measures. The region's businesses slipped when asked about activity, employment and profits.

"Such movements highlight the obvious seismic challenges and also why it was so important the Government took such proactive steps in using its own balance sheet last week, giving households -- and implicitly, businesses -- certainty (or hope) over where things are headed," Bagrie said.

Inflationary gauges from the survey eased, with a net 27 percent of firms expecting to be raising prices over the year ahead, down from a net 34 percent last month. One-year-ahead inflation expectations eased from 3.3 to 3.2 percent.

"We take mild comfort from both. Second-round pricing risks associated with a high headline rate of inflation are not manifesting, for now."

The survey did again raise the question of whether lofty business confidence readings would translate into reality, Bagrie said.

He noted a growing disconnect between confidence measures in New Zealand and other countries, particularly the United States where various business confidence measures had been slipping sharply.



  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:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report