NZ businesses remain mildly confident but cautious
BUSINESSDESK: New Zealand business confidence remained positive in June, even though it fell across all five of the main sub-sectors, with firms becoming more cautious in the winter months.
A net 13% of survey respondents expect better times for the economy in the year ahead, down from 27% in May, while a net 21% of firms predict their own activity will improve, down 14% to 20%.
"The good news is that confidence is still positive and it's natural to feel a little more cautious heading into winter," National Bank chief economist Cameron Bagrie said.
"The bad news is that stripping out the mild seasonal pattern shows confidence is still down, and has been heading that way since March."
That pattern was evident across the board, with profit expectations down 10% to 5%, investment intentions eased back 4% to 8% and export intentions remained weak, falling a percentage point to 13%.
A net 3% of firms expected to hire more staff, down 8% from May.
Agriculture came in last place across the confidence survey, while construction took pole position across all five indexes.
Residential investment intentions remained elevated at a net 29%, despite easing back from 58% last month. Commercial construction dropped back 8 percentage points to 17%.
"This is an unsurprising mix given the global economy’s challenges," Mr Bagrie said, although housing intentions were at odds with New Zealand's rising current account deficit and high foreign debt levels.
The gross domestic product expanded at 1.1% in the first quarter, twice the pace economists had predicted, according to government figures. The current account deficit widened to $2.8 billion in the three months ended March 31.
The National Bank's own growth indictor, which combines both this survey and the ANZ-Roy Morgan Consumer Confidence survey, is flagging a 1.5% annual growth rate.