Businesses stepped back from the cliff - a little - as the month of April progressed.
The final results of ANZ's Business Outlook survey for April are indeed grim, but not as unremittingly bleak as the preliminary results of the same survey that were released on April 8.
However, there's some very bleak news around construction - particularly residential construction, which was not included in the preliminary results as the sample size had been too small.
Confidence, particularly in residential construction, plummeted from the already not great levels in March.
Here's some of the highlights:
- Compared to March, April headline business confidence fell a further 3 points to -67%, but this was a small improvement versus the preliminary April read of -73%. A net 55% of firms expect weaker activity for their own business, awfully weak, but again, higher than the preliminary April data (-61%).
- Retail sector own activity is the weakest at -67%, with construction at -58%.
- Expected profitability, investment and employment intentions, while all deeply negative, saw small bounces from early April. A net 51% of firms intend to lay off staff, with remarkably even results across sectors.
- Inflation expectations also bounced to 1.46%, still well short of the 2% target midpoint but an improvement on the 1.28% level in the preliminary data.
ANZ chief economist Sharon Zollner said while the full-month April was, while still dire, a slight improvement on the preliminary early-April results.
"A glimmer of light at the end of the tunnel emerged over the month, with the country making solid progress in its Covid-19 battle."
But she said there was also a technical element to the lift.
"Given the questions are typically whether things will go up, down or sideways, for the roughly one third of the economy that couldn’t operate at all under Level 4 lockdown, ‘down’ wasn’t an option, for activity levels at least."
About two thirds of responses were included in our preliminary release on 8 April.
The first sample group scored -73% for business confidence; the second sample reported -58%. Similarly, a net 61% of firms who responded early in the month expected weaker activity ahead for their own firm; a net 47% of the later sample did.
"At least the data have found a floor, albeit a damp, cold basement," Zollner said.
Zollner said "it doesn’t get much worse" for a peacetime economy than Level 4 lockdown.
She said the levels of most indicators remain at levels that were "frankly unthinkable" before Covid-19 reached our shores.
"Businesses are really hurting. And it’s not just expectations. The proportion of firms that have already seen lower activity and have let staff go continues to rise. That will clearly remain a theme for some time.
"The Reserve Bank and the Government clearly have their work cut out to get this economy back on track.
"The Reserve Bank will be pleased to see the decline in inflation expectations arrested, suggesting that the launch of aggressive quantitative easing has had some success in demonstrating their commitment to keeping inflation within the target band. But with the survey data confirming a period of significant weakness ahead for the economy, they can’t relax. Nor can business owners. It’s a very bumpy road ahead as we take our first tentative steps back to normality.
"The nearly month-long level 4 lockdown was a triumph in terms of achieving its medical goals, but at an enormous economic cost.
"It has bought us a degree of certainty about the path forward of which most countries would be deeply envious. But it could still go awry. Let’s all do our part to do this exit right, lock in our hard-won gains, and make sure we never see Level 4 lockdown again."
19 Comments
Unless, of course, some portion of the glass has been emptied out, and anyone watching that happen might wonder "How much more will the contents be reduced by?" Or, if it has never been filled beyond halfway at any time in the past, and that's as much as it will ever hold; ie: it's already full.
Context is everything.
Has anybody really considered how impossible it is to open our borders again for this government ?
The strategy is elimination/eradication -- so any time cases got to 10+ they have to close down or admit it was wrong strategy
No vaccine will be 100% successful - at best 50% and some reduced impacts - so globally like the flu- be around for yeaars to come
Nobody can really come here if they have to do 2 full weeks quarantine in a hotel room and pay for the privilege- so thats 400K jobs not coming back - full stop
No one can travel abroad -- for same reason as above on their return- how long is that sustainable for our population
Having wrecked the economy and imposed the equivalent of Martial law -- they cant really move to a damping the curve strategy - without admitting that damage was only to push a whole load of communist policies- cant call it socialism - that requires everyone to work!
So She may be parading around the global stage like Lady Muck - but not sure she has any idea of how to extract NZ from this complete isolation ?/
Much better we crossed our finger and hoped this didn't happen? No one knows, still, it won't....
It was a picture that was repeated in villages all across Alaska. In just a few days nearly 200 people would die from the disease in the Bristol Bay area, leaving dozens of children orphaned. From some places, stories emerged of packs of stray dogs feasting on the bodies of the dead. In some communities, up to 90% of the population died and the mortality rates were some of the highest in the world.
https://www.bbc.com/future/article/20181023-the-places-that-escaped-the…
Spanish flu killed 20% during second wave. Not first.
Covid19 is also killing a lot higher depending on how it is handled. Italy hit 10% mortality rate on covid19 deaths alone. You need to also take into account all the deaths of people who could be treated due to hospital beds being full with covid patients.
Your comment is ignorant and foolish.
Oh, I don’t know. Perhaps we could start with a leader and a team that have a public mandate, a group that puts the rule of law and a transparent democratic process above all else, one that allows due process in law making, one that adopts a ‘common sense approach’ to the development of our Nation and one that gives directions to the public service to be accountable to its citizens. Perhaps that group could actually strengthen society by strengthening its individual members. For years politicians of all colours have fallen far short of a reasonable standard of governance, preferring to have their own snouts in the public trough rather than leading by example and doing what is right. I’m sure any of the many talented business and community leaders in the country could do the job!
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