New Zealand Business Confidence Plummets
8 April 2008
Results from NZIER's Quarterly Survey of Business Opinion for the March 2008 quarter paints a general picture of plummeting general business confidence and strong, persistent inflationary pressures.
A net of 56% of firms, on a seasonally adjusted basis, expect the general business situation to deteriorate in the next 6 months, compared with 38% that expected detioration from the December survey. The unadjusted figure was 64% of firms expecting the situation to deteriorate, compared with 26% from December.
A net 0% of firms intend to increase their staff levels in the next three months, compared with the 14% who intended to in the December study and 4% who actually have increased staff over the past three months.
Firms intending to increase selling prices in the next three months has risen from 35% in the December survey to 45% in the March Survey. Those expecting costs to rise has also risen, from 49% in December to 62% in March. Both of these March figures are the highest since March 1987, and this data will increase the discomfort of the Reserve Bank about pricing intentions and inflationary expectations.
Interest rates are also expected to rise over the next twelve months by 56% of financial services firms.