NZ facing weaker economic growth

WELLINGTON – Business confidence in New Zealand receded in August, with growth indicators pointing to weak economic growth in the second half of this year, a survey published yesterday showed.

Inflation expectations have also jumped to a 15-year peak, matching a recent Reserve Bank survey and further reinforcing market consensus for a delay to the start of an interest rate easing cycle. A net 34 per cent of businesses surveyed in August expect business conditions to worsen over the next 12 months, up from a net 31 per cent last month, according to the National Bank’s Business Outlook survey.Net confidence is defined as optimists minus pessimists.Firms’ own activity expectations have fallen to a net six per cent positive, the lowest level in five months.New Zealand’s economy began slowing mid-2005 after over five years of strong growth fuelled by a surge in Asian immigrants, a housing boom and a strong labour market.Nampa-APA net 34 per cent of businesses surveyed in August expect business conditions to worsen over the next 12 months, up from a net 31 per cent last month, according to the National Bank’s Business Outlook survey.Net confidence is defined as optimists minus pessimists.Firms’ own activity expectations have fallen to a net six per cent positive, the lowest level in five months.New Zealand’s economy began slowing mid-2005 after over five years of strong growth fuelled by a surge in Asian immigrants, a housing boom and a strong labour market.Nampa-AP