The latest National Bank business confidence survey shows the overall mood still positive – but with decidedly less confidence in that optimism than there was earlier in the year.The “headline figure – always volatile – has slid 36
The latest National Bank business confidence survey shows the overall mood still positive – but with decidedly less confidence in that optimism than there was earlier in the year.
The “headline figure – always volatile – has slid 36 points from its peak in February.
The more reliable “own activity” party of the survey shows a net 27% still in positive territory – that is, they expect better conditions for their own business in the year ahead.
Adjusted for seasonal factors though the figure is 19% positive.
National Bank chief economist Cameron Bagrie says the seasonal factors in the survey do not tend to be all that stable, and that “the fact that a net 19% of businesses remain positive about the outlook for their own business is still respectable, though below the historical average of 25%.”
The trend, however, is still down. A net 1% expects to be hiring in the coming year: a net 2% expect to be investing in plant and machinery.
“With both employment and investment intentions now centred around zero, the message is clear: businesses consider themselves to be in a holding pattern.”
In effect, he said, it was the late summer’s high positive reading which were the aberration, rather than the more wary business mood of recent surveys.
The kind of jolt the global and domestic economy received over the 2007-09 period meant, “this was never going to be your normal V or martini glass shaped recovery.
“Balance sheets need to be repaired. Resources mobilised from being overweight on the spending side of the economy to more real and productive earnings centric activities. …Ironically, tougher times in 2010 are foretelling of a better 2011.”
