Data Flash (New Zealand)
NBNZ Business Survey - April 2000
National Bank Business Outlook Survey
:::::::::::::::::::: Apr-00
Mar-00::::Feb-00
Business Confidence:::: 14.8:::: +27:::: +21
Activity Outlook:::::::: 36.6:::: +37:::: +38
Exports:::::::::::::::: 45.0:::: +40:::: +43
Investment:::::::::::: 15.8:::: +16:::: +16
Capacity Utilisation:::: 29.3:::: +30:::: +25
Profits:::::::::::::::: 18.9:::: +21:::: +18
Pricing Intentions::::::::27.9:::: +30:::: +26
Inflation Expectations:::: +2.6:::: +2.5:::: +2.4
Key facts
General business confidence decreased to +15% (net respondents) in April. Confidence was down across all sectors.
However, importantly, firms' expectations about their own level of activity over the year ahead were unchanged, with
+37% expecting good times ahead. Optimism regarding prospects for exports was up, while investment and employment
intentions were stable. Expectations regarding profitability were down slightly.
The net proportion of businesses intending to raise prices over coming months fell slightly, but remains at record
levels. A net 28% of firms expect to increase prices, compared with 30% in the March survey. Expectations for CPI
inflation over the next year increased to 2.6% from 2.5% in March.
Commentary
The NBNZ survey largely confirmed the results of the QSBO survey published in mid-April. Business confidence has fallen
- perhaps reflecting rising interest rates and concerns about Government policy - but remains at levels not too
dissimilar to those prevailing during H2/1999, when the economy was growing at close to 10% in annualised terms.
However, the activity outlook - followed more closely by the RBNZ - remained stable at around the high levels seen over
the past 9 months, consistent with an annual rate of economic growth of around 4%. Pressures on capacity continue to be
reflected in the NBNZ pricing indicators. Although down marginally, pricing intentions remain at 8-year highs, while the
expectation for year-ahead CPI inflation increased to 2.6% (our forecast is for inflation to hit 2.4% in the year to
Q1/2001).
Darren Gibbs, Senior Economist,
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