New Zealand business sentiment down following earthquake

| April 5, 2011 | 0 Comments

According to the New Zealand Institute of Economic Research (NZIER), business sentiment fell between January and March, following the 6.3 magnitude earthquake which hit Christchurch on 22 February.

A net 11% of companies surveyed said they were pessimistic about the general business situation in the three month period.

This compares with a net 1% showing they were pessimistic about the future in December‘s survey.

However, the NZIER highlights that around 40% of the firms affected by the earthquake were unable to respond.

The figures suggest the already faltering economy may see limited growth in the first quarter of 2011.

Last month, Statistics New Zealand revealed the economy avoided recession after growing by 0.2% in the October to December period.

The fourth quarter growth follows a contraction of 0.2% in the third quarter and takes the annual rate of growth to 1.5%.

Two consecutive quarters of negative growth would have pushed the economy into another recession.

The country’s Finance Minister Bill English has already warned that the earthquake will impact negatively on economic growth.

In an effort to boost growth, the Reserve Bank of New Zealand recently lowered interest rates to 2.5%.

At the time, the central bank said the move was a “one-off” but it will be guided by economic data.

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