9 Aug 2010

Business confidence slips on recovery uncertainty

2:59 pm on 9 August 2010

An economist says firms' uncertainty about the strength of the economic recovery is keeping business confidence muted.

The BNZ's latest monthly confidence survey, which polled 565 respondents last week, found a net 1% expect the economy to get worse in the coming year, a slight deterioration from July when a net 2% expected it to improve.

BNZ chief economist Tony Alexander says its good to see the drop in confidence has not been sharp, given dairy prices have fallen, the Official Cash Rate has been lifted and last week's unemployment figures were higher than expected.

He says the survey indicates companies are realistic about the lack of strength in the recovery, as householders concentrate on reducing debt and international uncertainty remains.