Business confidence up, but still weak
A ‘‘FREE-FALL’’ in business confidence may be over, but the outlook for the economy remains negative.
The monthly ANZ business outlook survey for September showed a net 19 per cent of businesses surveyed were negative about the general economy over the coming year.
The latest survey was more positive than in August, when confidence hit a six year low, as a net 29 per cent of businesses were negative about the general economic outlook over the coming year.
September also ended a run of declining business confidence in each of the last five surveys.
The net figure represents the difference in the number of those who are positive and negative, meaning the majority of those surveyed in August and September expect economic conditions to worsen.
‘‘The economy found a bungy cord attached, with the fall in business confidence being arrested,’’ ANZ senior economist Philip Borkin said.
Although Borkin said the survey reflected pessimism ‘‘after five successive months of decline in the headline figure the turnaround is welcome’’.
As in August, pessimists outnumbered optimists in all five of the surveys subsectors, retail, manufacturing, construction, services and especially agriculture, where a net 54 per cent were negative.
However all of the subsectors were more upbeat than a month ago. In the August survey a net 76 per cent in the agriculture sector were negative.
Companies were more confident about their own performance than the economy as a whole, with a net 17 per cent positive about their activity levels over the next year, up from 12 per cent in August.
The survey suggested the economy would grow at around 2 per cent over the coming year.
‘‘That’s soft, but not signalling an economy on its knees,’’ Borkin said.
ASB senior economist Jane Turner said confidence was still below where it fell to in July, and that taking into account seasonal adjustments, employment intentions had actually declined.
‘‘This is a worrying trend – particularly as we have recently revised our forecasts for unemployment rate to return to its previous post-GFC peak of 7 per cent,’’ Turner said.