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Hot Topic NBR Focus: GMO
Hot Topic NBR Focus: GMO
1 mins to read

Business upbeat despite horror month for markets


National Bank business confidence survey shows firms' outlook for their own business is still positive.

Rob Hosking
Wed, 31 Aug 2011

Firms' expectations for their own business outlook have barely wavered over the past month, despite the almost daily turmoil in the financial markets.

The latest National Bank business confidence survey shows firms' outlook for their own business is still positive: +43.3, down from last month's +43.7. Statistically, that is a "no change" result, and it is also well above the long term average of +26.

The headline figure - firms' outlook for the general economy - plummeted 13 points, but this is always a volatile figure and has shown itself to be of minimal use in forecasting future economic activity compared to the question about firms' own activity.

"The resilience in the own activity reading is telling," said the bank in its report on the survey result.

"Ultimately it is what businesses think about their own business prospects, as opposed to the general economic environment, that is the more
reliable indicator."

"Own activity" sentiment was down in manufacturing but up in the other sectors.

It is not all good news in the survey. Profit expectations are down, as are employment, investment, and export intentions, although all remain well into positive territory.

"The emergence of a cautionary tenor to the survey, particularly amongst exporters, is hardly surprising... Watching and listening to the 6pm news each night has been as uplifting
as listening to a coroner’s retirement speech."
 

Rob Hosking
Wed, 31 Aug 2011
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Business upbeat despite horror month for markets
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