New Zealand business confidence plunged to a seven-month low in June with retail most gloomy as costs, credit and capacity weigh on firms.
A net 39 per cent of 341 firms surveyed in the ANZ business outlook survey expect general business conditions to deteriorate in the coming 12 months, 12 points lower than May’s result and the lowest that measure has been since November 2017.
The survey has become a political football since the election as headline confidence has continued to weaken, with Finance Minister Grant Robertson saying he thinks it’s an issue around perception and the survey is not historically correlated with GDP growth.
Companies are also typically more downbeat about the broader economy under a Labour administration, and ANZ stressed today that business sentiment “is only one input into the decision-making that drives the economy” and “firms’ expectations of their own activity are a better gauge of future GDP growth.”
That measure was today down but remained positive, with a net 9 per cent of firms predicting increased activity in their own business, from net 14 per cent last month. . .
Businesses need trust and confidence to invest and grow, this government has shown little to foster either.
The captains’ call to halt future oil and gas exploration without consultation or warning; the fuel tax; the prospect of employment legislation which will strengthen unions at the expense of employers and employees; an increase in strikes; the prospect of higher inflation and interest rates . . .
All this and more are disincentives to the investment which is needed for the business growth which secures and increases employment and economic prosperity.