A fast fall in business confidence, identified in a new survey, is being seen as a failure of the economic recovery to live up to expectations.The latest BNZ monthly survey of readers of its Weekly Overview note found confidence had fallen for the third m
A fast fall in business confidence, identified in a new survey, is being seen as a failure of the economic recovery to live up to expectations.
The latest BNZ monthly survey of readers of its Weekly Overview note found confidence had fallen for the third month in a row.
Only a net 2 percent of 542 respondents expected the economy to improve during the coming year, down from 26 percent in June and from a peak of 56 percent last September.
BNZ chief economist Tony Alexander said the easy thing to say would be that a reality check on optimism was continuing following evidence a Depression scenario had been avoided.
Until recently the decline in sentiment since October could be put down to people becoming more realistic.
"...now there seems to be more an element of the actual economy not turning out to be as good as they thought, as good as some commentators have been saying, or as good as one might think with the Reserve Bank raising interest rates," he said.
"The decline in sentiment appears very much tied to a general lack of customers stretching across many sectors from retailing to residential real estate and transport."
Many respondents thought the Reserve Bank was wrong to raise the official cash rate, Mr Alexander said.
In residential real estate, the over-riding theme was that vendors were still not being realistic with price expectations, buyers were being cautious, and that people who did not have to sell were keeping their property off the market and producing a growing shortage of listings.
Both the legal and accounting professions had reported unusually poor levels of sentiment.
