NZ: Businesses don’t like uncertainty – BNZ

Stephen Toplis, Head of Research at BNZ, suggests that businesses don’t like uncertainty and that’s what they have now, as we await the shape of the new New Zealand’s government.

Key Quotes

“It was an uncertainty that was developing in the run up to the General Election as the polls moved hither and thither. That’s why the ANZ’s business confidence indicators took a reasonable dip in its September survey.”

“As things stood, activity indicators were already trending lower. This is not surprising as many of the key drivers of the economic expansion appeared to be peaking either because demand growth had peaked or supply constraints had become binding. In particular:

-  Net migration growth seems to have peaked;

-  Capacity constraints are impacting tourism;

-  Building growth is being constrained by credit, capacity and the run-down in Christchurch activity; and

-  It’s unlikely that commodity prices (especially dairy) can keep forging much higher.”