Fall In Business Confidence "Only Natural"

28 March 2003 Media Statement

"The fall in headline business confidence - from negative 16 percent last month to negative 33 percent this month - is only natural under the circumstances," Finance Minister Michael Cullen said.

He said it was a rational response to the uncertainty surrounding the implications of the Gulf war on the global economy, the sharp rise in the New Zealand dollar, weakening commodity prices, uncertainties over electricity supply and the prospects of drought in some regions.

"In fact the most surprising feature of the National Bank survey is that the important own activity indicator is still in firmly positive territory with a net 20 percent of firms still expecting to increase business over the next 12 months.

"This is a solid result and augurs well for the economy's ability to weather any turbulence ahead," Dr Cullen said.

ENDS

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