Business confidence plummets in March after February quake, halves growth indicator to 2% for year ahead, National Bank says

Business confidence plummets in March after February quake, halves growth indicator to 2% for year ahead, National Bank says

See the release from the National Bank:

Business confidence has plummeted. A net 9 percent of businesses expect worse times for the economy over the coming year, down 43 points from February. This is the second largest one month decline in business confidence in the history of the survey. Thankfully, there was a solid opening base (level) of confidence to absorb the large decline.

Other key gauges within the survey showed falls, though of differing magnitudes. Firms’ own activity expectations fell 22 points. A net 15 percent of businesses expect better times for their own business over the year ahead, down from a net 37 percent in February. The employment outlook has slipped into the red. Profit expectations fell from a net +15 to zero. Investment intentions dropped, but the magnitude of the fall was minor.

Our composite growth is pointing towards growth of 2 percent over the year ahead, around half what it was suggesting last month. The largest decline in confidence was recorded in Canterbury. Headline confidence fell a whopping 92 points. Firms’ own activity expectations in the region declined 55 points (from a net 47 positive to a net 8 percent pessimistic).

Stripping Canterbury out of economy-wide numbers still shows the same trend: confidence is down across each segment. The implication is simple: this is far from a local issue. It’s an economy-wide challenge.

No one can be blamed for not knowing what to make of it all, or what to do next. A large chunk of the hand-wringing in this month’s survey is likely due to uncertainty itself, which brings no good to anyone.

 Facing exceptional times we should hardly be surprised to see exceptional movements in confidence. At times like this it is important to keep a sense of perspective. There is no doubt that the rebuild in Christchurch represents an event of epic proportions. Policymakers have responded and are working hard to stabilise the economy. We’ve seen a rapid fiscal policy reaction and the central bank has cut interest rates. Such steps will help underpin an eventual recovery.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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14 Comments

 "No one can be blamed for not knowing what to make of it all, or what to do next"...if this is a comment about the economy...it's rubbish....utter hogwash.

 

I do love it, all reports etc on housing, Business confidence etc etc..strip Canterbury out so the country / economy/housing data does'nt look worse than it is....and we will include them in about 10 years time.

What a  lot of croc. 

After the

Christchurch earthquake,

Japanese tsunami,

Nuclear contamination problems,

War in the middle east

and

severe weather damage everywhere - what do you expect?

Balloons, cup cakes  and a party?

Of course confidence is down.

So we are where we are.

Stop moaning and get on with it.

Too true Big Daddy, and I know lots of PIs who are feeling rather perky right now and certainly "getting on with it".

 

Wow...that will boost the NZ$ in the world where good news is good news and bad news is good news.

and lucky for us all that Christchurch has absolutely no impact on any other part of our economy or that might be even more good news for the $ 

Thankfully there is absolutely no chance of achieving 2% growth this year so the good news keeps rolling in,  looking to the future 85cents to the dollar soon take the petrol price down :)

Confidence in Canterbury down 92 points - Alex can you find the actual numbers?

Say confidence is down to a net -50, then it could be something like 65% worse, 20% same, 15% better.  Would be interesting if they let us know how bad the result actually is.

Meanwhile-no mention in the media, as usual! Must not let the peasants revolt!

Meanwhile the govt keeps on borrowing.....

from stuff.co.nz

"More than a million beneficiaries and pensioners will get a boost from tomorrow as payments are increased to compensate for the higher cost of living.

Social Development Minister Paula Bennett said main benefits would increase by 3.75 per cent, which includes an extra 2.02 per cent added to cover the increase in GST from 12.5 to 15 per cent on October 1 last year.

She said the rise in superannuation would mean the married rate had increased by 6.85 per cent over the past year.

Student allowances will also rise from tomorrow."

They give cost-of-living adjustments to beneficiaries, but not to most public servants. That, to me, is ridiculous. What is the point in a supposedly right-wing government if they aren't tough on our most vulnerable citizens??

What amazes me is with the obvious fixing of data of late, how the hell did this one slip through?

Evidence?

regards

 

Well the unemployment stats are probably double, because the other half are hidden on the sickness benefit.

Those last GDP figures were absolute BS, although plenty here seem to agree they are meaningless.

But the 0.2% at a time when a negative rate would have meant second dip is just too much of a coincidence. Now they can push that out for 6 months.

As some stage we will all realise the extent of the lies, I am sure of that.

The NZD will soon catch up with the business sentiment data. Or there is no export led recovery