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Title: Business very gloomy View count: 178 Rating: 5.0 (1 ratings) Description: http://www.interest.co.nz The closely watched NZIER Quarterly Survey of Business Opinion (QSBO) found business confidence plummeted in the March quarter, but that inflationary pressures remain strong and persistent, suggesting there is little room for the Reserve Bank to ease official interest rates early. A seasonally adjusted net 56% of firms expected the general business situation to deteriorate in the next six months, which is the highest level since December 2005 and up from 38% in the December quarter of last year. On an unadjusted basis, a net 64% of firms expected worse times ahead, up from 26% in the December. This follows similarly downbeat confidence surveys from Westpac and the National Bank. The labour market outlook also deteriorated. A net 0% of firms expect to increase staff over the next 3 months, compared with a net 4% who actually increased staff in the last three months and the net 14% who said in December they would increase staff. Inflationary expectations remain high, which will keep the pressure on the Reserve Bank of New Zealand to keep interest rates high to push inflation back down into its target range of 1 to 3%. The net balance of firms expecting to increase prices in the next 3 months increased to 45% in March from 35% in December. The net balance expecting an increase in costs rose to 62% from 49% in December. This was the highest figure since March 1987. "The price and cost related data will increase the discomfort of the Reserve Bank about pricing intentions and inflationary expectations," the NZIER said in its statement. A net 56% of firms expect interest rates to rise over the next year, up from 51% in the previous survey. Tags: commentary, analysis, documentary, political, commercial, news, grassroots, outreach, gotcha!, Author: ofInterestNZ |
