Business confidence hits two-year low

Business confidence has plunged to a fresh two year low amid political uncertainty.

The ANZ business outlook survey for October showed a net 10 per cent of businesses are pessimistic about the year ahead, meaning more businesses expect general conditions to get worse in the coming year, than the number who expect to see an improvement.

However, the survey does not reflect the business community’s view of the new Government, as most of the responses were collected while coalition negotiations were still ongoing, before the make-up of the new administration was known. It is the lowest reading in the survey since September 2015 and marks a 10 point fall in a month. The September survey itself marked a sharp fall from August.

‘‘The finger can be pointed at political uncertainty,’’ ANZ chief economist Cameron Bagrie said. ‘‘This month’s sur-

Grant Robertson: Dollar fall normal

New Finance Minister Grant Robertson says the sharp fall in the New Zealand dollar is a typical reaction to changes of government around the world.

Already weaker in the weeks following the September 23 election, the New Zealand dollar has fallen significantly since the Labour-led Government was announced.

Against the US dollar, the kiwi has fallen around 3.5 per cent since October 19, vey primarily covers the uncertainty around the outcome and not the outcome itself. The latter will be next month’s story,’’ Bagrie.

ASB senior economist Jane Turner said the bank expected confidence would remain ‘‘subdued’’ in the short term, reflecting uncertainty from a change in Government.

‘‘The fall in businesses’ own activity below US69c. On a trade weighted basis, the New Zealand dollar fell around 3.3 per cent between October 19 and October 30.

In an interview with RNZ Robertson said the volatility was to be expected when financial markets faced a change in government anywhere in the world.

‘‘Whenever there’s change, the markets will react to that, and we’ve seen that with other governments around the world,’’ he said. expectations is more modest than the fall in headline confidence, but points to below-trend growth nonetheless,’’ Turner said.

A net 22 per cent of businesses expect better own company performance in the coming year, but this was an 8 point fall on September. Investment, employment, export and profit expectations all eased slightly.