Economic confidence slumps to two-year low
Confidence in the economy has dropped to the lowest level since March 2009, according to the BNZ Confidence Survey.
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Confidence in the economy has fallen to a two-year low after the Christchurch earthquake, according to the monthly BNZ Confidence Survey.
A net 20% of the 456 respondents to the survey expect the economy to get worse over the coming year.
This was down from a net 22% expecting improvement in the early February survey and 35% expressing net positive sentiment 12 months ago.
It was the worst result since March 2009, when a net 23.2% of respondents expected the economy to get worse.
And the earthquake may not be entirely to blame for the drop in confidence- only 68 of the 349 submitted comments mentioned the quake, including some comments in terms of higher business activity due to the refugee effect or emergency construction effect.
“Therefore one may be able to run an argument that without the earthquake the sentiment reading may well have declined anyway though there is no way of proving this,” BNZ chief economist Tony Alexander said.
“Perhaps the earthquake has merely crushed hopes many businesses had been expressing in recent months regarding the future even though comments about current conditions for many months have been overwhelmingly negative.”
All comments from farmers were positive, those servicing the agricultural sector are becoming more confident, forestry is very strong, and the information technology sector is largely noting rising activity levels, the survey found.
In residential real estate there were some comments regarding pressure appearing from Christchurch refugees and underlying positive comments regarding the rental and real estate market in Auckland.
But real estate overall still looks weak, while retailing also remains weak and tourism weak to mixed, according to the survey.
Niko Kloeten
Mon, 07 Mar 2011
Mon, 07 Mar 2011
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Economic confidence slumps to two-year low
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