Menu
Kiwi business confidence dips to decade-low

Kiwi business confidence dips to decade-low

Half of respondents expect economic conditions to deteriorate in the year ahead

Prime Minister Jacinda Ardern

Prime Minister Jacinda Ardern

Credit: Reuters

New Zealand business confidence sunk to a decade-low in August, an ANZ Bank survey has found, sparking fears that firms' holding off on investment would dampen economic growth - sending the New Zealand dollar sharply lower.

A net 50.3 per cent of survey respondents expected economic conditions to deteriorate in the year ahead, the most pessimistic result since April 2008, and a decline from July's 44.9 per cent.

The New Zealand dollar fell almost half of a U.S. cent to a six-day low of $0.6657 after the survey was published.

Confidence has been falling since Prime Minister Jacinda Ardern's centre-left coalition government took office in October, promising to reduce widening inequality.

Economists and the central bank have signalled that gloomy sentiment posed a risk to economic growth if it became a self-fulfilling prophecy in which firms held back from investing.

Reserve Bank of New Zealand Governor Adrian Orr said earlier in the month that weak business confidence dragging on economic growth could tip the balance from its current neutral stance in favour of a rate cut.

"It seems increasingly inevitable that wariness amongst firms will have real impacts, in the near term at least, as investment and employment decisions are deferred," said Sharon Zollner, chief economist at ANZ Bank.

A net five per cent of firms reported in August that they intended to reduce their investments, down six percentage points from the previous month in which a net one per cent of respondents said they intended to increase investment.

The survey does not seek a reason for the responses, but firms have complained about April's 5 per cent hike in the minimum wage and have raised fears that international investors would be spooked by a ban on many foreign homebuyers and on new offshore oil and gas exploration permits.

Ardern responded on Tuesday to firms' mounting pessimism, saying she would form an advisory council led by Air New Zealand CEO Christopher Luxon for the government to work closely with business.

(Reporting by Charlotte Greenfield; Editing by Eric Meijer)


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags governmentANZJacinda Ardern

Featured

Slideshows

Reseller News Innovation Awards 2019: meet the winners

Reseller News Innovation Awards 2019: meet the winners

Reseller News honoured the standout players of the New Zealand channel in front of more than 480 technology leaders in Auckland on 23 October, recognising the achievements of top partners, emerging entrants and innovative start-ups.

Reseller News Innovation Awards 2019: meet the winners
Malwarebytes shoots the breeze with channel, prospects

Malwarebytes shoots the breeze with channel, prospects

A Kumeu, Auckland, winery was the venue for a Malwarebytes event for partner and prospect MSPs - with some straight shooting on the side. The half-day getaway, which featured an archery competition, lunch and wine-tasting aimed at bringing Malwarebytes' local New Zealand and top and prospective MSP partners together to celebrate recent local successes, and discuss the current state of malware in New Zealand. This was also a unique opportunity for local MSPs to learn about how they can get the most out of Malwarebytes' MSP program and offering, as more Kiwi businesses are targeted by malware.

Malwarebytes shoots the breeze with channel, prospects
Show Comments