Business mood tumbles following Christchurch & Japan earthquakes
Business mood tumbles post-Christchurch & Japan.
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Business mood tumbles post-Christchurch & Japan.
The National Bank’s business confidence survey has taken its largest monthly fall since the global financial crisis and the second largest since it began.
The index fell 43% with a net 9% of businesses now expected worse times for the economy for the coming year compared to a net 34% positive last month.
The picture is a less negative when firms are asked about expectations for their own activity: here, the index fell 22 points, with a net 15% of firms expecting better time for their own business over the year ahead, down from a net 37% in February.
Profit expectations fell form a net +15% to zero; while employment intentions fell from +8% to -3%.
One positive sign is investment intentions fell much less than would be expected, given the size of the falls in the rest of the survey.
A net 6% firms still expect to be investing over the coming year, compared to 9% in the last survey.
The other portent though is less encouraging: pricing intentions are still on the rise, up two percent.
Inflation was not mentioned as a worry in the last Reserve Bank statement, notes National Bank chief economist Khoon Goh.
That statement cut the official cash rate 0.5% in a bid to stop too calamitous drop in economic activity and that move was correct, he said.
“But rising pricing intentions portend of an inevitable adjustment on the inflation front. Watch this space.”
Rob Hosking
Thu, 31 Mar 2011
Thu, 31 Mar 2011
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Business mood tumbles following Christchurch & Japan earthquakes
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