Business confidence figures due to atmospherics

“The fall in general business confidence recorded by the latest National Bank Business Outlook is at odds with the upbeat tone of most economic forecasts, including those to be presented later today in the December Economic and Fiscal Update,” Finance Minister Michael Cullen said.

“The continuing uncertainty in the geopolitical environment may be weighing on people’s spirits and exporters may be reacting to the strengthening New Zealand dollar but mostly the drop in the headline rate seems to reflect atmospherics.

“Although down on the previous month, the own activity index is still in positive territory and employment and investment intentions have increased. Profit expectations, while down sharply in the agricultural sector and slightly in the retail sector, have remained reasonably stable across other sectors.

“The bank, in its commentary on the results, suggests that the business community may be using the survey to send a message to the government regarding some pieces of legislation.

“The ACC reforms and the Employment Relations Act provoked a similar reaction in 2000 but have worked effectively in practice and have not justified the scare stories raised about them.

“I am confident the same will occur this time. The government has a responsibility to future generations as well as the current population, to workers as well as to employers and to the environment as well as to the economy and our legislative programme reflects that.

“Not everything we do will appeal to business. But we have done much to promote growth, to assist business and regional development and to encourage innovation and we will continue to put resources behind those policies through subsequent budgets,” Dr Cullen said.

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