What’s going on with NZ business confidence?
The latest ANZ Business Outlook released in June shows "slippery slopes" for local companies – and it's something many businesses will want to consider.
While confidence can be restored over time, companies can also think about business management software to ensure the organisation is on the right track today.
A look back
ANZ New Zealand Chief Economist Cameron Bagrie explained that it's not a serious issue, though one to keep an eye on.
"We're only just in negative: a net 2 per cent of businesses are pessimistic about the general economy. It's not a crevasse, but a crack has certainly opened up," he explained.
Historically, business confidence has remained high, at least following the 2011 Christchurch earthquake. Prior to that, confidence slipped in 2009 when New Zealand was in the midst of the recession.
When looking back even further, Trading Economics found that confidence averaged 6.38 from 1970 through to 2015, hitting a high of 80.90 in 1994.
Where we're at today
So what's playing a role in this current dip? It's not just one sector – several within New Zealand have noted weakened sentiments.
The outlook noted that agriculture was currently the "most downbeat sector", with sentiment, profits, investment intentions and employment all down in the red. In particular, dairy was a problem, as the average price for dairy products fell to the lowest level since 2009.
Construction sentiment was also down, as the sector showed the largest drop across all areas in activity expectations. Right now, it's unknown when this trend could see a reversal.
"We are left with an overarching impression of an economy experiencing moderating momentum," Mr Bagrie noted. "That's confirmed by our Composite Confidence gauge (which combines sentiment measures from both businesses and consumers). This gauge has been signalling decelerating momentum for three months now."
Mr Bagrie noted that New Zealand is currently dealing with greater economic challenges than those that existed six months ago, but the economy "still has come tricks up its sleeve", and the medium-term picture is positive.
With business confidence slipping, New Zealand companies may want to take the opportunity to overhaul other areas of the organisations. For example, implementing financial support software in order to gain control over accounts, GST and bank reconciliations.
It's an excellent option to relieve business pressure, as well as many day-to-day business hassles, so companies can get back to improving operations.