New Zealand business confidence continued to slide in the September quarter, as the positive outlook seen earlier in the year wasn't backed up by similarly strong actual economic activity, according to the latest Quarterly Survey of Business Opinion from the New Zealand Institute of Economic Research.
A net 20 percent of businesses remained optimistic in the September quarter, down from 32 percent in the June quarter. The measure has fallen some 50 percent from its peak in late 2013, excluding seasonal variations, and has moderated across all sectors and regions. The most recent quarter remains well above the historical average of net minus 5 percent.
"None of these readings are panic stations, they're a sign things are coming off the boil," NZIER princpal economist Shamubeel Eaqub told media at a briefing. "We had a very strong first half of the year and perhaps the second half of the year won't be as strong."
Since the start of the year, expectations for New Zealand's economic growth have slowed, with Treasury in August cutting its forecast for gross domestic product growth to 3.8 percent in the year ending March 31, 2015, from a previous estimate of 4 percent. A faster decline in terms of trade from the highest levels in 40 years, a sharp drop in international dairy and log prices, New Zealand's largest and third-largest export commodities, and a slower pace of domestic inflation suggest economic momentum may be slowing.
Optimism about domestic trading activity, which is closely aligned with economic growth, slipped to a net 14 percent positive in the quarter, seasonally adjusted, from a net 15 percent positive in the June quarter, and from a peak of net 25 percent positive in the last quarter of 2013. Expectations for the coming quarter fell to a net 29 percent from a net 32 percent.