Economy ‘not as rosy’ as confidence falls
Business confidence has fallen across New Zealand, with early signs that the construction boom could be coming to an end.
Yesterday, the Institute of Economic Research released the influential quarterly survey of business opinion, showing the number of businesses which were more confident about the economy in the coming year dropped to a net 16 per cent in March, from a net 26 per cent in December.
It was the lowest level of confidence in the survey in a year.
The drop was led by Auckland, where a net 6 per cent of businesses were more confident about the next 12 months, down from 31 per cent in December.
Overall confidence in the economy dropped in the upper North Island, lower North Island and the South Island.
Businesses surveyed had more confidence in their own activity, with a net 25 per cent expecting activity to increase in the coming year, the same proportion as in December.
The net scores represent the difference between the number of businesses expecting conditions to improve and the number expecting a decline.
While the number of businesses saying they planned to increase staff numbers in the coming year continues to outnumber those planning cuts, the difference has narrowed, dropping to a net 8 per cent.
‘‘The underlying drivers of the New Zealand economy are still positive heading into 2017, but the picture is not as rosy as at the end of 2016,’’ NZIER said.
‘‘There are signs growth in the construction pipeline is easing from the highs of last year. Although architects report a continued solid pipeline of residential and commercial work, the pipeline of government work is easing.’’
Meanwhile the job market continues to look good for job seekers. A net 24 per cent of businesses said they were finding it more difficult to find unskilled staff in the March quarter, the highest figure in that part of the survey since 2007.