Overall business confidence is on the turn – but there's one chilling factor in this warm spring shower.After five months of steady decline the National Bank business confidence survey, released this afternoon, showed a pick up, with a net 24% of re
Overall business confidence is on the turn – but there’s one chilling factor in this warm spring shower.
After five months of steady decline the National Bank business confidence survey, released this afternoon, showed a pick up, with a net 24% of respondents in the positive territory, up 10% on last month.
That up-tick is not so pronounced when adjusted for seasonal factors (spring usually sees a surge, mostly because of the beginning of the agricultural season, but is still in the net positive, up from +7% to + 9%.
More importantly, firms’ expectations for their own businesses are a net positive 22%, up on last month’s +20%.
That is still, however, below the long-term average of +25% when businesses are surveyed about their own prospects.
Profit expectations are up, and – an even more important indicator of improved prospects – employment intentions rose from a net +1% to net +8%.
The spot of bad news is export intentions – apparently a casualty of the high $US/New Zealand dollar cross-rate.
Export intentions dropped 12% this month, with a net +20% expecting to export in the year ahead, compared to +32% last month.
This may be a lagging factor – the months of high currency have until this month not dented export intentions until now. But the turnaround suggests the costs of carrying the higher rate are getting too high for some exporters.
The other unexpected factor in the survey was a surprisingly upbeat one – business confidence in the earthquake-struck Canterbury region is well above the national average, although some of this is due to a construction sector which can see no shortage of work for quite some time.
