Business confidence slips but firms more bullish on own prospects
BUSINESSDESK: New Zealand business confidence retreated this month, though firms grew more bullish about their own prospects and pricing intentions and inflation expectations are rising from their lows.
A net 17% of respondents in the Business Outlook survey expect conditions to improve over the next 12 months, down from 20% in August. Companies' own activity expectations improved, with a net 29% expecting more activity in their business in the year ahead, up from 26% last month.
"The New Zealand economy has still come through in reasonably resilient fashion," National Bank chief economist Cameron Bagrie says. "Businesses can take heart. There is nothing like a trip to the US or Europe to lift one's spirits regarding New Zealand."
The latest monthly survey shows export intentions rose to 18% from 16.9%, employment gained to 8.5% from 6% and profits rose to 8.1% from 5.3%.
Construction intentions remained strong, with residential building up at 52% from 46.7% and commercial construction rising to 34.8% from 21.9%. Investment intentions weakened to 8.9% from 10.8%.
Firms planning to raise prices rose to a net 17.4% from 16.1% and inflation expectations rose to 2.39% from 2.34%.
Ease of credit has fallen away to 4.6% from 12.8%.
The strongest growth came from construction. A net 47% of firms expect to spend more on residential construction up from a net 28% and a net 21.9% may invest more in commercial construction, up from a net 4.3%.
"This offers some hope that the construction sector can help fill the void across the economy in late 2012 and early 2013," Mr Bagrie says.
Profit expectations rose to 5% from 1%, which the bank noted was "still marginal". It described pricing intentions as "tame", with a net 16% expecting to raise prices in the year ahead, down from 17.3% last month.
Inflation expectations eased to 2.34% from 2.55%.