New Zealand business confidence fell for the first time in five months, with firms showing more caution in the face of global financial market turmoil, trimming expectations for exports, profits, pricing and hiring.
The National Bank Business Outlook survey showed a net 34.4 per cent of businesses expect better timesahead for the economy as a whole, down from a net 48 per cent in last month's survey. Firms' view of the economy has dimmed even though they're still upbeat about their own prospects, with a net 43.3 per cent seeing better times ahead, barely changed from the July survey.
Given the "tumultuous" period across global markets in August "we are not surprised to see greater caution evident in local business sentiment," said Cameron Bagrie, National Bank chief economist.
The monthly survey was released at the same time as the New Zealand Institute of Economic Research's quarterly predictions report, which forecasts economic growth of just 1.4 per cent this calendar year, and 2.6 per cent in 2012 as households repay debt and hold off on spending.
That's softer than the Reserve Bank's June forecasts, which were picking growth of 2.8 per cent and 4.7 per cent respectively.
A net 18.5% of those firmed polled in the NBNZ survey expect exports to rise in the next 12 months, down from a net 31 per cent in last month's survey. Investment intentions slipped to a net 12.3 per cent from 17.9 per cent.
Residential construction got a slightly stronger reading at 48.3 per cent from a net 41.9 per cent last month while for commercial construction, the latest reading of 27.% weakened from 32.4 per cent in July.
A net 9.1 per cent of those surveyed expect to hire workers in the next 12 months, down from a net18.9 per cent in last month's survey.
Those expecting bigger profits fell to a net 15.6 per cent from 23.9 per cent.
A net 81.9 per cent expect interest rates to rise in the coming year, a leap from July's reading of 59.2 per cent.
A net 20.5 per cent expect to raise prices over the next 12 months, down from 29 per cent last month, yet inflation expectations rose to 3.45 per cent from 3.15 per cent.
