Wairarapa businesses still confident

Chamber of Commerce chief executive Stephanie Gundersen-Reid said there was "a lot of positive things coming out of Wairarapa".

Business confidence is still high in Wairarapa, despite falling confidence nationwide, according to the Wairarapa Chamber of Commerce.

Nationally, business confidence continued to slide in the September quarter, as the positive outlook seen earlier in the year was not backed up by similarly strong actual economic activity, according to a quarterly survey of business opinion released by the New Zealand Institute of Economic Research.

Chamber of Commerce chief executive Stephanie Gundersen-Reid said there was a lot of positive things coming out of Wairarapa, so talk in the business community was still quite positive.

Dairy payouts were not superb but a lot of people knew they were not going to be, so they had not changed much, she said.

"People in the regions just get on with it," she said. "That's what they've always done and what they will always do."

New Zealand wide, a net 20 per cent of businesses remained optimistic in the September quarter, down from 32 per cent in the June quarter. The measure has fallen some 50 per cent 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 per cent.

"None of these readings are panic stations, they're a sign things are coming off the boil," NZIER principal economist Shamubeel Eaqub said yesterday. "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 GDP growth to 3.8 per cent in the year ending March 31, 2015, from a previous estimate of 4 per cent.

Optimism about domestic trading activity, which is closely aligned with economic growth, slipped to a net 14 per cent positive in the quarter, seasonally adjusted, from a net 15 per cent positive in the June quarter, and from a peak of net 25 per cent positive in the last quarter of 2013.

"Confidence is a necessary but not a sufficient condition for decisions that drive economic activity," the survey said. "When businesses are optimistic, they are more likely to hire and invest -- but not always. In the last 6-9 months, intentions have been positive but hiring, investment and sales have not followed."

The services sector, which is New Zealand's largest sector in the economy, stalled in the quarter, NZIER said. The sector's hiring intentions fell to net 1 per cent positive from net 8 per cent in the June quarter.

Confidence across the building and construction sector rose, with a net 25 per cent of firms hiring in the September quarter, up from a net 18 per cent in the June quarter.

Manufacturing was mixed, as output rose to net 21 per cent positive from net 6 per cent, while domestic sales fell to a net minus 1 per cent from net 15 per cent positive in the June quarter. The outlook for exports improved.

Ease of finding skilled labour improved, with a net minus of 26 per cent saying it was difficult to find qualified staff, from a net minus 32 per cent the previous quarter, while unskilled labour was at net minus 7 per cent, from net minus 11 per cent in the June quarter. The survey comes after Reserve Bank governor Graeme Wheeler kept interest rates on hold last month.

- APNZ with additional reporting by NZ Herald