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 welcomes industry figures for 2019 Hall of Fame lunch

Reseller News welcomes industry figures for 2019 Hall of Fame lunch

Reseller News welcomed 2018 inductees - Chris Simpson, Kendra Ross and Phill Patton - to the third running of the Reseller News Hall of Fame lunch, held at the French Cafe in Auckland. The inductees discussed the changing landscape of the technology industry in New Zealand, while outlining ways to attract a new breed of players to the ecosystem. Photos by Gino Demeer.

Reseller News welcomes industry figures for 2019 Hall of Fame lunch
Upcoming tech talent share insights at inaugural Emerging Leaders Forum 2019

Upcoming tech talent share insights at inaugural Emerging Leaders Forum 2019

The channel came together for the inaugural Reseller News Emerging Leaders Forum in New Zealand, created to provide a program that identifies, educates and showcases the upcoming talent of the ICT industry. Hosted as a half day event, attendees heard from industry champions as keynoters and panelists talked about future opportunities and leadership paths and joined mentoring sessions with members of the ICT industry Hall of Fame. The forum concluded with 30 Under 30 Tech Awards across areas of Sales, Entrepreneur, Marketing, Management, Technical and Human Resources. Photos by Gino Demeer.

Upcoming tech talent share insights at inaugural Emerging Leaders Forum 2019
Show Comments