Tuesday, September 30, 2008

Latest confidence survey already history

Is there any point in conducting surveys of economic sentiment, when the financial situation changes from day to day?

More specifically, should we pay any attention to the findings of the National Bank's business confidence survey for September, released today, which show that business sentiment in this country has turned marginally positive for the first time since May 2002?

Among today's developments:

  • New Zealand's NZX 50 Index fell 123 points, or 4 percent, to 3064, in response to the rejection by the United States Congress of the US$700 billion (NZ$1.05 trillion) plan to bail out the ailing US financial sector.

  • Finance Minister Michael Cullen and National leader John Key both warned that New Zealand could suffer serious economic damage if the US fails to reanimate the plan.

  • The New Zealand dollar continued its downward slide against the greenback. In early afternoon trading it was buying US66.91c, having traded at US67.16c this morning.

    Though the fall in the dollar will undoubtedly please some exporters, there was little else in today's news that will engender optimism.

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