Business confidence up as economy improves
Surveys show positive outlook for economy but businesses aren't jumping for joy just yet.
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The New Zealand economy is showing signs of improvement but confidence in the recovery is still weak, according to two new surveys.
According to the BusinessNZ Planning Forecast for the September quarter, forward-looking indicators show the New Zealand economy continuing to improve despite nervousness in global markets.
The BusinessNZ Planning Forecast incorporates BusinessNZ’s Economic Conditions Index (ECI) which tracks 33 indicators, including GDP, export volumes, commodity prices and inflation, debt and confidence figures.
The manufacturing and agricultural sectors are both showing relatively strong growth, and domestic and household confidence data continue to improve.
However, mounting government debt and fiscal deficits raise prospects of a credit rating downgrade if government spending is not reined in.
Meanwhile, the BNZ Confidence Survey also shows increased optimism about the economy.
A net 36% of respondents expect the economy to be in better shape in a year’s time, up from a net 22% in August but down from a net 45% in July.
"However, while hopes are high for stronger economic activity next year, the tone of comments submitted by respondents about current conditions in their sectors remain largely, though not completely, downbeat," BNZ chief economist Tony Alexander says.
"One theme running through the responses is that some business activity has been put on hold ahead ofthe Rugby World Cup and other activity is expected to be similarly sidelined until the competition is over.
"Overall margins still appear tight, and while there is concern from exporters about the exchange rate it isnot as strong as one might expect. In residential real estate listings remain in short supply, Auckland is shifting more and more toward a sellers market, but there is no flood of buyers as such with most still seeming cautious.
"The construction sector remains weak and this month there are noticeably more expressions of concern about factors delaying building in Christchurch."
Niko Kloeten
Mon, 05 Sep 2011
Mon, 05 Sep 2011
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Business confidence up as economy improves
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