WELLINGTON - Business confidence has been pegged back in December, the latest National Bank survey shows.
Optimists took 40 per cent of the votes, pessimists 19 per cent and net confidence - optimists minus pessimists - stood at 21 per cent, down from 25 per cent in November. The bulk of
responses were received after the General Election.
The bank's chief economist, Brendan O'Donovan, said the centre-left election win brought hardly more than a shrug from the business community.
Many survey indicators were down - but not dramatically, he said. The exception was manufacturers.
Mr O'Donovan said they had given the thumbs down to any potential change in policy direction and across most indicators, their confidence fell the hardest.
They had recoiled at the potential for nationalising ACC, higher income taxes, increased protectionism, changed labour laws and more intrusive government.
Mr O'Donovan said that the change of government would result in a port tack - but nothing so dramatic as to capsize the economic boat.
The same short-term economic drivers were in place:
* An improving international economy.
* A competitive exchange rate.
* Bearable interest rates.
* More stimulative fiscal policy.
Confidence in domestic-focused sectors - construction, retail and services - held up best, inflation expectations were higher, as were expected interest rates, housing and commercial construction.
That pattern of responses implied expectations of higher government spending, more infrastructural investment, higher income taxes and greater government tolerance of inflation - the last two favoured assets generating capital gain. - NZPA
