NZ: Business confidence fell further in June -Westpac

Dominick Stephens, chief economist at Westpac, notes that the New Zealand’s business confidence fell in June, and remains close to the very low levels it reached shortly after the election of the Labour-led Government in late-2017.

Key Quotes

“Firms' impression of their own business activity levels fell only slightly. Activity responses in the survey have hovered about these low levels since the last election.”

“We had expected that business confidence would lift a little in the wake of the Government's decision to cancel capital gains tax, but that has not happened. It is difficult to discern much signal from this survey given that it carries such an obvious political bias. But we have noticed that actual business investment and hiring decisions have cooled recently, so low business confidence really has impacted the economy. Today's data gives little hint that that situation has changed.”

“Turning to actual economic activity, the detail in the survey did improve slightly. Most notably, residential construction expectations lifted sharply, and have now recovered from a surprising drop over the previous two months. This removes any doubt about the strength of residential construction activity at present. Intentions to invest and employ were up only slightly, and intentions to invest were down a touch.”