7 Mar 2011

Business confidence at two-year low after quake - survey

9:43 pm on 7 March 2011

The Christchurch earthquake has pushed down business confidence to a two-year low, according to a BNZ survey.

The monthly confidence survey, which polled 456 respondents last week, found a net 20% expect the economy to get worse in the coming year. That's a turnaround from last month, when a net 22% expected it to improve.

BNZ chief economist Tony Alexander says most of the drop is due to the earthquake and the uncertainty it has created for firms and households.

Mr Alexander says it is normal for a such devastating event to increase uncertainty. He expects sentiment to improve in coming months.

He says retailers are particularly negative about the economic outlook, and cashflow remains tight in the accounting and legal professions.

However, sentiment in the agricultural, forestry, farming and information technology sectors is positive.