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NZ business confidence eases in June

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NZ business confidence eases in June

3News NZ

Firms have become more cautious in the winter months

Firms have become more cautious in the winter months

New Zealand business confidence remained positive in June, even as confidence fell across all five of the main sub-sectors, with firms becoming more cautious in the winter months.

A net 13 percent of survey respondents expect better times for the economy in the year ahead, down from 27 percent in May, while a net 21 percent of firms predict their own activity will improve, down 14 percent to 20 percent.

"The good news is that confidence is still positive and it's natural to feel a little more cautious heading into winter," Cameron Bagrie, chief economist, said in a statement.

"The bad news is that stripping out the mild seasonal pattern shows confidence is still down, and has been heading that way since March."

That pattern was evident across the board with profit expectations down 10 percent to 5 percent, investment intentions eased back 4 percent to 8 percent and export intentions remained weak, falling one percentage point to 13 percent.

A net 3 percent of firms expected to hire more staff, down 8 percent from May.

Agriculture came in last place across the confidence survey, while construction took pole position across all five indexes.

Residential investment intentions remained elevated at a net 29 percent, despite easing back from 58 percent last month.

Commercial construction dropped back 8 percentage points to 17 percent.

"This is an unsurprising mix given the global economy's challenges," Mr Bagrie said, although housing intentions were at odds with New Zealand's rising current account deficit and high foreign debt levels.

New Zealand's gross domestic product expanded at 1.1 percent in the first quarter, twice the pace economists had predicted, according to Government figures.

The current account deficit widened to $2.8 billion in the three months ended March 31.

NZN

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Comments

28/06/2012 4:28:36 p.m.

Pete wrote:

Could the organisation that collects these Business Confidence stats please publish figures showing how well this glorified tea-leaf reading actually correlates with subsequent economic stats? I'm quite sure that there would be a strong negative correlation. It's surely the most useless of all the dodgy stats that are regularly published.