Michael Gordon, analyst at Westpac, points out that New Zealand’s business confidence fell further in the June quarter as the general business sentiment fell from -28 to -31, its lowest level in 10 years.
Key Quotes
“Firms’ own-activity expectations also turned negative for the first time since 2009.”
“The June survey showed a further deterioration in the pressures that businesses have faced in recent quarters. A growing number of firms are reporting a rise in their average costs, but are unable to pass these on as higher prices. Consequently, profitability has taken a dive and is expected to get worse.”
“Low profitability is in turn weighing on hiring – in fact, firms reported that on balance they had shed workers in the last three months.”
“Today’s result was even weaker than what the monthly business surveys had signalled, and it presents a clear downside risk to our forecast of 0.6% growth for the quarter.”
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