Rates hikes tipped after survey

Wednesday 14 July 2004

Economic researchers and at least one leading economist say hikes in official interest rates are even more likely following the latest survey of business confidence.

By The Landlord

The New Zealand Institute of Economic Research (NZIER) has found business confidence improved slightly in the June quarter but businesses remain gloomy.

A net 20% of those surveyed believed business conditions will worsen over the next six months, compared with the previous survey's net 29% of firms expecting a deterioration.

In seasonally-adjusted terms, a net 18% expected conditions to worsen compared with a net 32% expecting conditions to worsen in the first quarter.

The recovery in confidence was seen in all sectors apart from construction, where it dipped noticeably from the March survey to negative 21% from 8%, and was most noticeable in the South Island.

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