'New Zealand business confidence lowest since 1970'
Wednesday, 14 January 2009, 00:11 IST
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Wellington: Business activity and confidence in New Zealand, which has been in recession since the start of 2008, is at its lowest since 1970, according to a survey of companies released Tuesday. The New Zealand Institute of Economic Research (NZIER) said its quarterly survey of business opinion found 44 percent of firms reported a fall in their businesses in the last three months of 2008. A net 43 percent said they expected their trading activity to decrease in the first quarter of this year. Both figures were the highest since March 1970 and ASB Bank economist Nick Tuffley said they indicated that the recession would continue to the middle of the year, if not longer. Robin Clements, senior economist with investment bankers and stockbrokers UBS New Zealand Ltd, said the survey results showed a collapse of business sentiment. "We had been anticipating a deterioration in most aspects, but to see many measures at their worst in near 40 years was beyond our comprehension," he said. The NZIER said business confidence had deteriorated across all four sectors survey - manufacturers, builders, merchants and services. Nearly one in three firms surveyed said they would lay off staff in the first three months of this year - the biggest percentage in more than 17 years. Analysts said rising unemployment would delay the economic recovery. Analysts predicted the Reserve Bank, which reduced its benchmark interest rate by a record 1.5 percent to five percent last month, would cut it again by up to one percent at its next scheduled review of monetary policy Jan 29. Prime Minister John Key, whose centre-right government was elected in November but has been on holiday like most of the country since Christmas, has called a meeting of his economic ministers for Thursday to discuss measures to counter the recession.
Source: IANS
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