Latest / Best of Business / Brad Olsen: Infometrics Principle Economist on the increased optimism from businesses

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Brad Olsen: Infometrics Principle Economist on the increased optimism from businesses · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk ZEDB. Follow
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  Speaker 2: It's time to Talk Business with Brad Owsen. Brad, good morning,
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  Speaker 2: Good morning. How's business confidence looking at the moment.
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  Speaker 3: Well, we've actually seen a bit of an increase coming
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  Speaker 3: through there. The latest survey, according Survey of Business Opinion
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  Speaker 3: from NZII, shows a net nine percent of businesses optimistic
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  Speaker 3: about economic sort of operating conditions going forward. That's the
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  Speaker 3: first time we've seen a positive number from that survey
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  Speaker 3: in nearly four years, and it does come if you
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  Speaker 3: look back last quarter, a net four percent of businesses
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  Speaker 3: was thinking it was going to be worse going forward,
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  Speaker 3: and so that's now flipped around to a net nine
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  Speaker 3: percent positive. That's definitely a good sign and those sort
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  Speaker 3: of more optimistic expectations coming through positive for growth expectations
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  Speaker 3: this year. But at the same time, around twenty six
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  Speaker 3: percent of businesses said that in the December quarter they
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  Speaker 3: had less to do and less business activity and fewer
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  Speaker 3: sales and similar than four So that would indicate potentially
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  Speaker 3: that the recession continued through into the end of the
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  Speaker 3: year through that December quarter, and we won't get those
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  Speaker 3: official numbers for a couple of months, but that feeling
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  Speaker 3: of pretty tough at the end of last year quite clearly,
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  Speaker 3: but also better things to come. Probably one of the
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  Speaker 3: more interesting figures was the fact that at twenty nine
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  Speaker 3: percent of construction businesses were expecting better things coming through.
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  Speaker 3: And we talked yesterday about bigger, higher levels of building
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  Speaker 3: consent starting to show through, so again a little bit
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  Speaker 3: of that, those green shoots starting to emerge.
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  Speaker 2: Good stuff, grocery supplier costs re accelerate slightly.
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  Speaker 3: You've still got some concerns around that sort of cost
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  Speaker 3: pressure through the economy. Our grocery supply costs index that
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  Speaker 3: we've just put out late yesterday highlighted that supply costs
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  Speaker 3: increased two point two percent over the year to December.
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  Speaker 3: That's a very slight increase on the two point one
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  Speaker 3: percent the month before and two point zero percent the
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  Speaker 3: month before that, So it's not huge, but it is
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  Speaker 3: just turning around ever so slightly, And I think what
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  Speaker 3: we're seeing coming through in the numbers is just a
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  Speaker 3: few sort of key drivers that have been emerging in December.
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  Speaker 3: Of course, with those higher dairy prices we've been seeing
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  Speaker 3: internationally recently. That's good for our exporters, but to remain competitive,
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  Speaker 3: we've also seen domestic prices increase and so over the
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  Speaker 3: last couple of months, and certainly in December, the likes
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  Speaker 3: of milk, cheese, butter cream, those sort of items have
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  Speaker 3: increased a bit more so unwelcome news, I think for
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  Speaker 3: people thinking about their shopping trips and what those sort
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  Speaker 3: of supply costs might mean for what they're paying on
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  Speaker 3: when they go to the supermarket. But also indicates that
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  Speaker 3: we're not completely and utterly through with inflation yet.
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  Speaker 2: And apparently a lot more people on floating interest rates.
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  Speaker 3: Yes, the VATA start that we saw this week for
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  Speaker 3: it was actually for November at the end of last year,
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  Speaker 3: showed around about forty seven percent of new lending, new
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  Speaker 3: mortgage lending that was being fixed for just a floating term,
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  Speaker 3: so well, not fixed at all, rather it was just floating.
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  Speaker 3: That was the highest proportion we've had in quite a while,
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  Speaker 3: probably going back to at least sort of mid twenty twenty,
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  Speaker 3: maybe a little bit earlier now that makes sense. Back
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  Speaker 3: in November, everyone was going, well, if I wait till
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  Speaker 3: the end of November, I'll get the last call from
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  Speaker 3: the Reserve Bank before the end of the year, before
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  Speaker 3: they take a three months break, so I might as
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  Speaker 3: well wait it out a little bit and see the
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  Speaker 3: best straight that I can get. But what was also
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  Speaker 3: interesting was that although you had this big increase in
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  Speaker 3: the floating term, which makes a lot of sense, you
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  Speaker 3: had very few people going for six months and a
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  Speaker 3: lot more coming for one year. And that does seem
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  Speaker 3: to be a lot more people going look, oh and
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  Speaker 3: find something else.
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  Speaker 2: Yeah, just lost you. But at the end there, Brad,
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  Speaker 2: but good on you. That's Brad Olsen with Business This Morning.
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