Business Confidence stalls after gains the previous month. National lays the blame squarely in the lap of the Coalition Govt, which dismisses its comments as 'rubbish'

Business Confidence stalls after gains the previous month. National lays the blame squarely in the lap of the Coalition Govt, which dismisses its comments as 'rubbish'

The Opposition says Government Ministers' continuing to “shoot from the hip” with comments pertaining to private enterprises have caused business confidence to stall.

National’s Finance Spokeswoman Amy Adams says if the Government isn’t careful, it is going to “rip the guts out of the very strong economy it inherited.”

Her comments follow new data from ANZ, showing business confidence is down slightly on the month prior.

A net 20% of businesses are pessimistic about the year ahead, down 1% versus February.

Last month, confidence rebounded by almost 20% – at the time, Prime Minister Jacinda Ardern called it a “significant jump.”

But business confidence is now “treading water,” says ANZ Chief Economist Sharon Zollner.

Adams suggests Regional Economic Development Minister Shane Jones’ calls for Air New Zealand’s chairman to stand down have rattled businesses.

She also points the finger at the Prime Minister’s signals to the oil and gas sector that Greenpeace’s call to end fossil fuel exploration was “under consideration.”

“The drops we have seen since the election tell us there is a real reason to be concerned that if this Government isn’t very careful, they are going to rip the guts out of the very strong economy they inherited.”

Jones says Adams’ comments are “rubbish” and that she is simply “trotting out lines that you expect to hear in Opposition politics.”

Associate Finance Minister David Clark says Adams “needs to make more serious comments if she wants to be taken seriously.”

He says there are a number of indicators within ANZ’s figures which have gone up and, overall, the trend is “in the right direction.”

The number of firms which are expecting to lift investment, for example, is up five percentage points on the month prior.

Employment intentions are also up, and export intentions are back at pre-election levels.

Crawling, not gliding

Zollner says a “marked divergence” was evident across the retail and agriculture sectors last month, which both sank significantly.

But firms’ views of their own activity, which Zollner says has the stronger correlation with GDP growth, lifted from +20 to +22.

“The economy is certainly not crawling, but it’s hardly gliding along.”

Since the numbers for last month were released, GDP data revealed a fairly lacklustre 2017 fourth-quarter growth figure.

Zollner says that this far into the cycle it is naturally hard to accelerate.

“But while sectors of the economy such as housing and construction may be tiring, record-high terms of trade and a positive outlook for incomes are providing helpful buoyancy.”

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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21 Comments

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Highlight new comments in the last hr(s).

https://www.youtube.com/watch?v=v5okeR5BhTc

YOU HAVE TO WATCH THIS.

The first quarter of 2018 has not finished yet. You have surprises after surprises that will produce consequences for the whole world.

Hang on there, the new government!

Just hope we are not forced to pick sides.

Of course fears of a USA instigated trade war have had zero impact on our exporters.

USA increased interest rates, Canada is slowing down, Europe is not flash as well.
I hope i'm wrong but it smells like GFC 2...

Too early to postulate like this. Need some real stats and grit first for traction, up until then National advised to keep their powder dry as just bleating about things is entirely counterproductive. Would think the tax agenda when it is finally revealed will be more than a suitable target for broadsides.

13
up

Oh Amy..... why do I think there is more to it than this? 9 years of neglect...go away and come back with some policies that support us all..not just foreign investors, landlords, irrigation schemes for your mates, banksters, and swampkauri exporters.

Arrogant and denial comments by the Coalition have come early.

What Is The Yield Curve And What Does It Mean?
https://crushthestreet.com/articles/breaking-news/yield-curve-mean

Now we are talking sense Well done Andrew
It’s all about the bond market always tells
Hope the others here read it
https://crushthestreet.com/articles/breaking-news/yield-curve-mean
Explain how blockchain tech will help exactly ?
It’s confidence it’s sentiment in markets that drop no Blockchain will stop GFC2

What is the impact of lower business confidence?

Less spending

contraction, staff layoffs, no pay rises. holding on to existing plant, as opposed to replacing. paying down debt. this would normally be offset by government increasing debt. oh whoops robertson/ardern/peters have emptied the coffers!

Business confidence is down according to a survey conducted by ANZ Bank

They don't disclose the size of the survey or who the respondents are
They could have pulled the data out of their ...
Wonder if Fletcher Building is one of the respondents?

Are the banks up to their eyeballs in credit to the Farming Community
Are the banks tightening up on their lending to the Farming Community
You bet they are

Of course GFC2 is coming
Laughable JP Morgan encouraging buying on the blips when their own technical analysis will be warning otherwise
Who wants to be a fundamental investor when the charts are showing strange
flat lining in bonds the FED doesn’t like the look of .
No my friends NZ$ is a safe haven so expect to see foreign $ heading your way along with Singapore & Switzerland another couple of havens

I look forward to paying it off for the next 50yrs (30 now)

Any tips?? Cheers

dream on. funds will flow out of nz when the fed increases rates, and nz inc. can't. the rbnz is stuck between a rock and a hard place. my understanding is that this is happening now.

Funds won't flow out of NZ - for every seller there is a buyer at the same price.

Net flow is always zero - just the price at which the transactions take place varies.

When more people want to sell NZD than buy, NZD devalues. Money in effect has left the country. Expect higher interest rates if our dollar starts falling to make up for the currency losses. One good thing is that our exports get more competitive.

circular argument JB. net effect is we pay more for capital, mortgages, and inputs. same applies to government and debt servicing.