NZ business confidence slips

Photo / Kenny Rodger

New Zealand business confidence slipped this month as the stalling economic recovery makes businesses cautious committing to new activity.

A net 29.5 per cent of respondents are expecting better times ahead this month, down from a net 33.2 per cent in November, according to the latest National Bank Business Outlook.

Companies' expectations for their own activity slipped to a net positive 34.5 per cent this month, from 35.3 per cent in November.

"There are still enough factors to keep businesses cautious about prospects, hence the failure to kick-on and see the improving trend in confidence over October and November extend into December,"
said chief economist Cameron Bagrie in his report.

Firms have "waited and waited and are still not sure what they see."

New Zealand's economic recovery took a knock in the second half of this year as households focused on repaying debt rather than ramping up spending, forcing the Reserve Bank to delay hiking interest rates from very stimulatory levels.

The survey shows more businesses are expecting to boost exports over the coming 12 months, with intentions climbing to 24.3% from 20.8% in November.

Expected profits slipped to 14.8 per cent from 15.4 per cent last month, while investment rose to 8.3 per cent from 6.6 per cent.

Hiring intentions improved this month, with a net 12.5 per cent expecting to take on new staff in the coming year compared to 11.5 per cent in November, while pricing intentions rose to a net 21.6 per cent of respondents predicting higher prices, compared to 17.7 per cent last month.

Ease of credit rose to 11.8 per cent from 10.7 per cent, while inflation expectations were little changed at 2.84 per cent from 2.86 per cent last month.

Bagrie said retailing and manufacturing sectors showed an improvement in sentiment this month, though agriculture, construction and services declined.