Unhappy days here again, say NZ firms

New Zealand business owners are among the world's gloomiest.

With an optimism rating of 23 per cent, the country comes in at 19th in the Grant Thornton International Business Owners survey of 30 countries, involving businesses employing 10 to 50 people.

The rating is at its lowest level for three years in terms of confidence about the economic outlook for the new year.

Last year, 64 per cent were positive. This year it is 23 per cent, below the global average of 39 per cent.

Grant Thornton New Zealand chairman Peter Sherwin said the fall was "probably a result of continuing stories about a pending economic slump and a considerable amount of uncertainty that had its genesis in the general election campaign".

He said Australia had had similar cautions about its growth prospects but business confidence - 64 per cent and a seventh-equal placing with Singapore - was "obviously more resilient and less fickle" there.

Answers to other questions in the survey show a less gloomy view than the optimism query might suggest.

Sherwin said that while New Zealand business owners were more optimistic than previously about the chance of better selling prices, and maintained a similar level to the previous two years when asked about turnover, optimism fell when they were asked about increased employment and profitability.

"This very much indicates that they believe it is tougher to maintain margins and, therefore, this leaves less scope for employing new staff," he said. "This is not a good sign for us as a country and economy, unless there are productivity gains to offset these factors."

Not only were New Zealand companies deeply gloomy about the general economic outlook, their view of their own activity over the coming year had fallen into negative territory for the first time in 5 1/2 years; a net 2.4 per cent expect to go backwards.

Results of the Grant Thornton survey come as the Institute of Economic Research prepares today to release its Quarterly Survey of Business Opinion. The ANZ said it expected the survey to show "weak confidence, declining activity expectations, and a tailing off in pricing intentions".

The decline is expected to be similar to that seen in the National Bank Business Outlook survey last month.

That survey found that businesses were gloomier about their prospects than at any time since 2000's "winter of discontent".

Boom & gloom

Businesses asked about outlook for country over next year. Optimism rating = percentage of optimists minus percentage of pessimists.


* 1 - India 93 per cent
* 2 - Ireland 84 per cent
* 3 - South Africa 80 per cent
* 4 - Mainland China 77 per cent
* 5 - Philippines 71 per cent
* 6 - Mexico 68 per cent
* 7= - Australia 64 per cent
* 7= - Singapore 64 per cent
* 9 - Netherlands 63 per cent
* 10 - Argentina 62 per cent
* 17 - US 32 per cent
* 19 - New Zealand 23 per cent
* World average 39 per cent