Cullen welcomes confidence turnaround

By Phil Boeyen, ShareChat Business News Editor

Wednesday 19th December 2001

Finance Minister Michael Cullen has welcomed the latest National Bank outlook survey which has shown a strong rebound in general business confidence from negative 18% last month to negative 2%.

The outlook report says there are solid reasons for business sentiment to improve but notes that "a touch of Christmas cheer doesn't hurt either".

"Overall, the mood of our survey respondents has brightened markedly from last month, increasing the odds that any disruption to investment plans will be mild and short-lived," says the bank's chief economist Dr John McDermott.

"There are some positive areas in the domestic economy helping to sustain economic growth and keeping New Zealand out of recession."

Dr McDermott says unemployment is at 13-year lows, net migration has turned positive, and building activity in New Zealand is booming.

"The buoyancy in the domestic economy has allowed firms' activity outlook to improve markedly in all sectors except agriculture.

"Even retailers are positive about their own activity despite poor October sales. Indications are that there has been a good start the Christmas shopping period, driven by low interest rates, low petrol prices and higher incomes."

Finance Minister Michael Cullen says an encouraging aspect of the latest survey is that a net 28.2% of respondents expect their own businesses to grow over the next 12 months.

"That should be good for both investment and employment decisions."

Dr Cullen says the bounce back indicated in the survey should be sustained by growing expectations of an economic recovery the United States.

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