Economy recovering 'on one crutch' – NZIER
Today's business mood survey comes with a large health warning.
Today's business mood survey comes with a large health warning.
"We are recovering but we are recovering on one crutch," New Zealand Institute of Economic Research's principal economist Shamubeel Eaqub said in releasing the institute's latest quarterly survey of business opinion.
That "one crutch" is the Canterbury rebuild.
The survey shows firms' expectations of their own growth for the coming year are still positive, but have fallen from +30% to +20%.
Their outlook for the overall economy fell from a similar level from +31% to +13%.
That is consistent with GDP growth of 1.5%, Mr Eaqub said, and is more realistic than previous outlooks.
"Expectations have been telling us growth has been 4-6% a year and we know that is just not true."
The construction sector is picking up strongly.
"Most of the improvement is Canterbury, which is soaring, but for the rest of the country the trend is, gradually down. Its nothing to panic about but at the same time its not the recovery we were looking for."
Retail and services sector outlook is at historic highs, something the institute attributes to the Rugby World Cup.
Overall, the picture is of not of decline, but not much growth either, Mr Eaqub said.
"The majority of firms are saying things are flat. While it's encouraging that things are not getting worse, but at the same time what we're seeing is a holding pattern."
Rob Hosking
Tue, 04 Oct 2011
Tue, 04 Oct 2011
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Economy recovering 'on one crutch' – NZIER
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