Business confidence is continuing to slip, the National Bank says, and is now down 34 points from the peak reached six months ago in February.
The National Bank's latest monthly business confidence survey shows a net 16% of respondents expect general business conditions to improve in 12 month’s time.That's down 12 points on last month.
"We’ve referred to the last few months as seeing momentum wane from a gallop to a canter to a trot," National Bank chief economist Cameron Bagrie said.
"The risk is building that we take a further step down to a mere walk."
Bagrie noted that firms’ own activity expectations continued to soften. A net 26% of businesses expect better times for their own firm over the year ahead, down 6 points from July.
"This takes firms’ activity expectations to broadly “average” levels, which a glasshalf full description would describe as still respectable. But a glass half-empty view would take it as somewhat disconcerting to see firms’ own activity expectations recede (or level out) so early in the recovery process."
One area to buck the weakening trend was export intentions, with a net 31% of businesses expecting to be exporting more over the year ahead.
Meanwhile, Bagrie noted that pricing intentions barely budged. A net 32% of businesses expect to be raising prices over the year ahead. This meant that at current levels, pricing intentions were consistent with 4% inflation, a relatively demure picture, Bagrie said, given the anticipated boost to inflation from the October 1 GST hike and other one-offs in the second half-year.
"We have an economy that appears to be settling into a moderate expansion phase, albeit with clear risks," said Bagrie. "There’s growth all right, but it doesn’t feel like it for a lot of folks. Such is the base-effect reality of recovering from lows."
"On top of that we have an economy embarking in deep-rooted structural change that involves massive portfolio and resource reallocation as the economy shifts from being spending centric to one of being more earnings (i.e. export) driven. Resources (labour and capital) take time to mobilise. The term 'this time is different' insofar as describing recoveries is typically a grave-yard for economists. But things are certainly pointed that way at present."
Business confidence - Activity outlook
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12 Comments
Be of stout heart , my quivering wee luvvies ; slow steps forward are progressing the NZ-Debtanic . GDP is positive ...............not a bed of roses , but I never promised you a rose garden ............ just a little sunshine , when others can only see rain ..............
The blind leading the blind isn't it!....we are moving into a state of 'new normal' and taking with us the gargantuan pile of debt built up during the 'time of the great stupidity'. Renters with skills are escaping to aus. landlords are rushing to flog off their property. Retailers are bashing down their profits running sales that are by now the minimum needed to bring bodies into the shops. Billions have been lost and or stolen in finance company rorts and dumb projects. Govt revenue is falling and the fiscal hole opens before English...so he goes on borrowing in hope. Labour scream out for more govt spending..more borrowing above and beyond the Dipton man.
It all leads to an economy strangled by debt and unable to escape the noose. But there are winners..oh yes there are...the banks.! On they go happy to suck the life from the economy and with the fall support of the govt. Must be paid for the credit they dreamed up. Wouldn't be fair to blame them in any way at all for the shite the economy is in. Hell no.
Well if you had been in hibernation over winter; then that poll news would have come like a bolt of lightning.....
If you turn off the TV, avoid the newspaper and just start looking at and listening to the people around you then you will be far ahead of, and better informed than the polsters and those informing them.
What will the next polls say? Just look and listen....you can answer that now.
National Bank chief economist Cameron Bagrie said ...."We've referred to the last few months as seeing momentum wane from a gallop, to a canter, to a trot....The risk is building that we take a further step, down to a mere walk,"....don't you folks go worrying you hear...the English language has a whole chapter of words for an economist to use before going backwards!
'Shuffle' comes to mind...then 'nudge'...not to forget 'crawl' and 'creep along'...'edging up'...and 'forward momentum'....aint that so Cameron?
Cameron is kicking himself that he went from gallop to trot in three steps....he could have taken about a hundred steps! Wake up Cameron...you need to revise that chapter on 'economic spin and the use of the English language!
"...given where I think things have to go"....am I right in thinking you are thinking about dark places PDK? We are down to the shuffle stage I think...soon to get the hang of the 'moonwalking' !
Property unaffordability remains the single most destructive consequence of several years of idiotic govt mismanagement. Only when we see govt policy directed to drive down property prices...only then can we talk of better times ahead. Somebody has to take the losses first. Somebody has to stop protecting the banks.
Yes Wolly. I used preach (I think that would best describe it) the need to get onto a sustainable pathway, before TSHTF. That was back in the mid-Eighties. Nobody listened then, they told me to buy Ariadne shares. I declined. Latterly, they were all getting into RE. I went counter-cyclical, built on a shoestring, undebted and hunkered-down. Wrote my first warning piece in the ODT - likening people like me to Father Berkenhopf (he died ringing his church bell to warn his parishioners, the night the Dambusters did their damage upstream).
Nobody listened - too busy being inspired by 'dream homes' and 'my castles'.
Caveat emptor, old son. Life's grand on the outside, eh?
"...once the house prices drop and nz gets a slight recovery people will start playing the game again because what are the other options"....there are other options Ukman but many savers are fearful of investments other than bank deposits due to the dreadful financial markets in Noddy. The average person is certain they will have their savings stolen by shites in suits. Sadly, they are not far off the mark.
So not only does the govt need to turn the financial market inside out and start with the regulations to boot out the crims and punnish those caught with more than a good telling off...the govt needs to boot the media in the bum and demand some seriously good financial reporting with an end to the never ending stream of property ponzi BS.
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