Tuesday, April 1, 2008

Doom and gloom in Kiwiland

The results of the latest business confidence survey by the National Bank, released today, show that a net 57.9 percent of companies expect general business conditions to worsen during the coming 12 months. There has thus been a sharp rise in pessimism since last month, when a net 43.9 percent of businesses expected conditions to worsen.

The largest declines in confidence were recorded in the residential and commercial construction industries, in which 46.2 percent and 30 percent, respectively, of businesses now expect conditions to worsen. But confidence is also down in the manufacturing, agriculture, retailing and services industries.

Significantly, a net 6 percent of companies expect their own business to slow down in the coming year.

The findings - the worst since the recession of 1991 - have led to predictions of a big cut in interest rates by the Reserve Bank as early as September. There have also been forecasts of a US10c fall in the value of the kiwi dollar, which closed yesterday at $79.29c.

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