Latest / Best of Business / Michael Gordon: Westpac senior economist on business confidence picking up for the June quarter

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Michael Gordon: Westpac senior economist on business confidence picking up for the June quarter · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk zed B.
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  Speaker 2: The gender pay gap, at least at the board level
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  Speaker 2: is basically gone. Will get you across that. Jamie McCay
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  Speaker 2: speaking of the Opportunities Party, Jamie McKay and what the
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  Speaker 2: farmers think of them, and Inder Brady is with us
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  Speaker 2: out of the UK right now to seven pass six. Now,
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  Speaker 2: we've got some good business confidence numbers for you. Nzier
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  Speaker 2: figures show a modest lift in the June quarter and
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  Speaker 2: net twelve percent of business leaders are feeling positive. That
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  Speaker 2: is up from just one percent in March. Michael Gordon
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  Speaker 2: is a senior economist at wes Packham with us now, Hey, Michael,
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  Speaker 2: good evening, what do you reckons? Taking it from one
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  Speaker 2: percent in March to twelve percent net positive in the
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  Speaker 2: last month.
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  Speaker 3: I think this is really a reflection of how the
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  Speaker 3: Middle East situation has been playing out because things are
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  Speaker 3: moving so quickly. Unfortunately, this kind of means there's no
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  Speaker 3: good time to do one of these surveys. We saw
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  Speaker 3: in this one. Earlier responses were a bit more pessimistic
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  Speaker 3: than later ones, which came after the memo of understanding
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  Speaker 3: between US and I. But of course Trump says that
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  Speaker 3: he's now back at war again, So maybe it's the
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  Speaker 3: earlier results that are more relevant to where we're heading
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  Speaker 3: from here.
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  Speaker 2: Well, quite right. I mean, so if we were to
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  Speaker 2: do the survey today, when we're back into a six
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  Speaker 2: potentially a sixty day window of bombing and carrying on,
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  Speaker 2: what do you think it would show?
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  Speaker 3: Yeah, I think it would show something more negative. I mean,
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  Speaker 3: just as as a rough guide, world oil prices at
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  Speaker 3: their best probably got down to about seventy US dollars
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  Speaker 3: a barrel before their conflicts started heating up again. It's
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  Speaker 3: now sort of sitting around eighty four dollars a barrel,
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  Speaker 3: so not in triple digits like it was at the worst.
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  Speaker 3: But of course there's you know, things are changing from
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  Speaker 3: day to day, so we will see where we end
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  Speaker 3: up even a week from now.
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  Speaker 2: Okay, here's the devil in the detail.
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  Speaker 3: Though.
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  Speaker 2: The own activity measures, which tend to have a closer
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  Speaker 2: correspondence with gdproop GDP growth, were little changed for the quarter.
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  Speaker 2: What do you make of that?
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  Speaker 3: Yeah, I mean, I think that's the more relevant measure here.
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  Speaker 3: Just businesses know their own or you know, business owners
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  Speaker 3: know their own business best rather than trying to opine
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  Speaker 3: about what other people might be thinking. And they're saying that,
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  Speaker 3: you know, things are kind of holding in. It's you know,
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  Speaker 3: not great but not awful. But I think for from
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  Speaker 3: say the Reserve Bank's point of view, it's not really
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  Speaker 3: suggesting to me that the economy is running any stronger
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  Speaker 3: than they thought when they did their last set of forecasts.
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  Speaker 2: Yeah, forty one per net of firms have raised their
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  Speaker 2: prices in the last quarter. What does that mean for inflation?
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  Speaker 3: Yeah, well, I think you've got a bear in mind,
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  Speaker 3: it's quite a short time horizon for these questions. It's
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  Speaker 3: really asking about the next three months. And not surprisingly
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  Speaker 3: a bunch of businesses they've all experienced a hit to
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  Speaker 3: their fuel prices. They many of them are hoping that
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  Speaker 3: they can pass that on to their customers. But beyond that,
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  Speaker 3: it's not really telling us a lot about the kind
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  Speaker 3: of inflationary dynamic where price rises get price rises. That's
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  Speaker 3: more a question about your your one year ahead and more,
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  Speaker 3: and that's not really covered the SUVE.
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  Speaker 2: Hey, thank you very much, Michael. As always, it's good
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  Speaker 2: to talk to you. Michael Gordon Wispak, senior Economists.
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