NZ business confidence at lowest level since 1974

WELLINGTON, Jan 17 (Reuters) – Business confidence in New Zealand fell to its lowest level since 1974 in the fourth quarter of last year as companies grapple with rising interest rates, cost pressures and weak demand, a private think tank said on Tuesday.

The New Zealand Institute of Economic Research (NZIER) Quarterly Survey of Business Opinion (QSBO) showed that a net 70% of companies surveyed expected overall business conditions to worsen, compared with 42% pessimism in the previous quarter.

It added that business confidence was now at its lowest level since 1974, and on a seasonally adjusted basis it was the lowest since the survey began in 1970.

On a seasonally adjusted basis, 73% expect business conditions to worsen, compared with 43% who were pessimistic in the previous period. The survey’s measure of capacity utilization fell to 93.7% from 94.5% in the previous quarter.

NZIER said the survey came after the central bank’s November meeting was more hawkish than expected, weighing on sentiment.

Builders and retailers were the most pessimistic in the December quarter. In its report, NZIER said businesses had become more cautious and were now pursuing plans to cut jobs and invest.

A net 81% reported an increase in costs in the December quarter, it said.

Reporting by Lucy Craymer in WellingtonEdited by Matthew Lewis

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