Friday, 19 August 2022
Meet the JournalistsPremiumAucklandWellingtonCanterbury/South Island
CrimePoliticsHealthEducationEnvironment and ClimateNZ Herald FocusData journalismKāhu, Māori ContentPropertyWeather
Small BusinessOpinionPersonal FinanceEconomyBusiness TravelCapital Markets
Politics
Premium SportRugbyCricketRacingNetballBoxingLeagueFootballSuper RugbyAthleticsBasketballMotorsportTennisCyclingGolfAmerican SportsHockeyUFC
NZH Local FocusThe Northern AdvocateThe Northland AgeThe AucklanderWaikato HeraldBay of Plenty TimesHawke's Bay TodayRotorua Daily PostWhanganui ChronicleStratford PressManawatu GuardianKapiti NewsHorowhenua ChronicleTe Awamutu Courier
Covid-19
Te Rito
Te Rito
OneRoof PropertyCommercial Property
Open JusticeVideoPodcastsTechnologyWorldOpinion
SpyTVMoviesBooksMusicCultureSideswipeCompetitions
Fashion & BeautyFood & DrinkRoyalsRelationshipsWellbeingPets & AnimalsVivaCanvasEat WellCompetitionsRestaurants & Menus
New Zealand TravelAustralia TravelInternational Travel
Our Green FutureRuralOneRoof Property
Career AdviceCorporate News
Driven MotoringPhotos
SudokuCodecrackerCrosswordsWordsearchDaily quizzes
Classifieds
KaitaiaWhangareiDargavilleAucklandThamesTaurangaHamiltonWhakataneRotoruaTokoroaTe KuitiTaumarunuiTaupoGisborneNew PlymouthNapierHastingsDannevirkeWhanganuiPalmerston NorthLevinParaparaumuMastertonWellingtonMotuekaNelsonBlenheimWestportReeftonKaikouraGreymouthHokitikaChristchurchAshburtonTimaruWanakaOamaruQueenstownDunedinGoreInvercargill
NZ HeraldThe Northern AdvocateThe Northland AgeThe AucklanderWaikato HeraldBay Of Plenty TimesRotorua Daily PostHawke's Bay TodayWhanganui ChronicleThe Stratford PressManawatu GuardianKapiti NewsHorowhenua ChronicleTe Awamutu CourierVivaEat WellOneRoofDriven MotoringThe CountryPhoto SalesNZ Herald InsightsWatchMeGrabOneiHeart RadioRestaurant Hub

Advertisement

Advertise with NZME.
Business

NZ businesses remain pessimistic in first quarter as worries over government persist

9 Apr, 2018 09:52 PM3 minutes to read
Finance Minister Grant Robertson (left) and Prime Minister Jacinda Ardern. Photo / Mark Mitchell

Finance Minister Grant Robertson (left) and Prime Minister Jacinda Ardern. Photo / Mark Mitchell

BusinessDesk
By Rebecca Howard

New Zealand businesses remained pessimistic about the country's economic fortunes in the March quarter as negative sentiment following the change in government continued into the new year and as profitability remains weak.

A seasonally adjusted net 9 per cent of firms surveyed in the New Zealand Institute of Economic Research's quarterly survey of business opinion expect economic conditions to deteriorate over the coming months compared with a seasonally adjusted 11 per cent that had expected a deterioration in the prior quarter.

"Business confidence had fallen sharply in the December 2017 quarter in the wake of the new Labour-led government taking office, and this pessimism has carried over into the first quarter of 2018," said NZIER principal economist Christina Leung.

The headline confidence reading, however, is more pessimistic than firms' own trading with a net 15 per cent experiencing increased activity in the March quarter versus 10 per cent in the prior quarter and a net 16 per cent anticipating more demand in the next quarter versus 17 per cent in the December quarter.

Advertisement

Advertise with NZME.

"It's more about sentiment than actual activity," said Leung.

Retailers are still the most pessimistic of the sectors, despite an increase in new orders and domestic sales. Changes in employment laws announced by the new government, including an increase in minimum wage, are likely to have contributed, said Leung.

"Changes in the labour law are of key concern, particularly amongst the smaller businesses," she said.

The QSBO showed profitability remained weak in the March quarter with a net 7 per cent reporting lower earnings, unchanged from the December quarter and expectations are for profitability to remain the same in the next quarter.

Regarding the headline confidence number, Leung noted the "continued weak profitability appears to be a key contributor to this pessimism, and businesses are not optimistic this will improve."

The QSBO showed a net 1 per cent of firms indicating plans to reduce investment in buildings versus 2 per cent that indicated they were planning to increase it in the December quarter. A net 17 per cent have plans to invest plant and machinery versus 10 per cent in the prior quarter.

Related articles

Business

Would David Jones merger spell the end for Myer?

09 Apr 05:19 AM
Business

Under-the-table warning: Taxman's robots to hunt out cash jobs

09 Apr 05:00 PM
Business

#YouNext: Prepare for more skeletons in the NZ business closet

09 Apr 08:00 PM
Business

Bankrupt Auckland builder blows $1.5m at casino

09 Apr 10:41 PM

According to Leung, with labour costs increasing, firms may be looking to mitigate cost pressures by investing in labour-saving technology.

Firms are still finding it difficult to hire new staff, with a net 44 per cent saying skilled labour was hard to find, versus 49 per cent in December. A net 29 per cent found it hard to attract unskilled labour, compared to a net 31 per cent in the prior period.

Advertisement

Advertise with NZME.

Companies still expect to face cost pressures, with a net 35 per cent anticipating increased costs compared to 38 per cent in December while experienced costs were largely unchanged with a net 31 per cent reporting higher costs compared to 29 per cent in the prior period.

Pricing intentions lowered, with 21 per cent expecting to lift prices in the coming quarter versus 31 per cent in March, while a net 16 per cent raised prices in March versus 18 per cent in the prior period.

Advertisement

Advertise with NZME.

Latest from Business

Premium
Business

What lies ahead for Genesis Energy after profit lift?

19 Aug 05:45 AM
Premium
Business

Should the All Blacks wear black? And the other no-brainer for Air NZ's Greg Foran

19 Aug 05:43 AM
Premium
Business

Adrian Orr accepts mortgage rates could fall next year

19 Aug 05:40 AM
Premium
Business

Market close: F&P Healthcare drags market down

19 Aug 05:37 AM
Premium
Business

NZ headed for recession in 2023, but inflation to fall fast - BNZ

19 Aug 05:34 AM

Most Popular

Ombudsman sends PM 'please explain' over Sharma allegations
New Zealand|PoliticsUpdated

Ombudsman sends PM 'please explain' over Sharma allegations

19 Aug 07:04 AM
Kawhia shooting: Mum haunted by frightening escape into darkness with children
New Zealand|CrimeUpdated

Kawhia shooting: Mum haunted by frightening escape into darkness with children

19 Aug 04:04 AM
Premium
Cecilia Robinson rejoins My Food Bag board amid 'deeply disappointing' share price
Business

Cecilia Robinson rejoins My Food Bag board amid 'deeply disappointing' share price

19 Aug 05:32 AM

Advertisement

Advertise with NZME.
About NZMEHelp & SupportContact UsSubscribe to NZ HeraldHouse Rules
Manage Your Print SubscriptionNZ Herald E-EditionAdvertise with NZMEBook Your AdPrivacy Policy
Terms of UseCompetition Terms & ConditionsSubscriptions Terms & Conditions
© Copyright 2022 NZME Publishing Limited
TOP