Outlook not all bleak as spirits down
Confidence in the economy is down across the country, but things are not all doom and gloom for Manawatu¯ .
Three different surveys – the quarterly survey of business opinion, the ANZ business outlook survey and the WestpacMcDermott Miller Regional Economic Confidence report – returned results showing growing levels of pessimism with the economy.
Lower levels of confidence tend to be reflected in business spending and hiring.
Palmerston North City Council economic policy advisor Peter Crawford said the December figures for new car registrations, which are seen as an indicator of business investment, also backed the findings of the business confidence surveys.
There were 197 new car registrations in Palmerston North in December 2017, showing there had been no growth from December 2016.
‘‘Most new car registrations are by businesses, whereas individuals tend to buy secondhand cars because they are much cheaper,’’ Crawford said.
Palmerston North’s Smart Phone Repairs owner Paul Gwynne said he immediately noticed a change in the Kiwi dollar post election, which had a big impact for his business.
‘‘[The New Zealand dollar] bombed at first. Most of our stock comes from overseas and as soon as Labour got in, the New Zealand dollar took a nosedive. You can’t really put your prices up too much, so you have to take a hit.
‘‘It has kind of recovered now, but it is still not back to where it was.’’
But while the change in Government was the key reason the reports listed for the change in confidence, Crawford believed there were likely other factors at play in some of the regional centres.
‘‘The Auckland economists attributed a lot to the Government, but I think the drought probably had an impact on a lot of regions,’’ he said.
‘‘The difficult spring and quick change to drought is likely to have been an important contributor to the decline in the region. Fonterra also announced on December 7 that it was reducing its milk payout price.’’
But Palmerston North exceeded the national spending growth rates for accommodation, bars, cafes and restaurants and takeaways.