Tony Alexander, BNZ economist.

MIL OSI Analysis – Source: BNZ Economist Tony Alexander – Analysis:

Headline: BNZ Confidence Survey Results – August 2015

Tony Alexander, BNZ economist.
Tony Alexander, BNZ economist.

Our first Confidence Survey since April last year produced a huge 778 comments on specific industries. People clearly had something they wanted to say. In the dairy sector woe reigns and respondents struggled for adjectives to describe their pessimism – and almost all of the results came in before the most recent dairy auction results. However, outside of dairying and house building in Christchurch comments were quite positive with construction particularly strong in Auckland and non-dairy exporters rising outside forestry and happy at the falling exchange rate. The results support a view of slowing NZ growth, but not recession.

Mission Statement

To help Kiwi businesspeople and householders make informed financial decisions by discussing the economy in a language they can understand.

The results here come from our resurrected monthly survey of over 11,000 Sporadic readers. To receive Tony Alexander’s outputs please click here.

Dairy vs. The Rest

Welcome back to the results of our (resurrected) BNZ Confidence Survey. Clearly people had something they wanted to say because we received 778 industry comments at final cut-off time this morning while the average number from 2006 to 2014 was 266. The previous peak was 642 in March 2009 when we were all being badly affected by the Global Financial Crisis.

We have dropped the previous opening question regarding whether people feel that the outlook for the economy is getting better or worse.

There are already plenty of such measures out there and they have fallen quite strongly in recent months. But here is the interesting thing which we glean from this month’s results. Industry comments outside of dairying do not present a picture of an economy turning strongly downward. There is certainly strong opinion on the ground in Christchurch that house building has peaked and potential over-supply beckons, while Christchurch commercial property is showing some weakness. And in the dairy sector people are struggling for adjectives to describe their woe. Our results came in almost entirely before the latest dairy auction result. But non-dairy export sectors look firm, practically all commentary about Auckland indicates strong economic activity, while Auckland housing strength is spreading solidly to some other locations. The lower NZ dollar has been greeted positively in many quarters. Few respondents mention interest rates. Skilled labour remains hard to find in numerous industries.

With regard to specific sectors the following broad comments can be made.


Accountants overwhelmingly report that clients are doing well and there is high demand for advisory services. Christchurch-based respondents identify some weakening in client activity recently, and at the margin some accountants more generally are seeing client accounts slightly worsen. Some farming clients weakening.

Advertising and Marketing

Bar one response all others seem on the weak side. Some farming clients weakening.

Business Consultancy and Services

A very diverse grouping of advisors, researchers, and business brokers. Quite positive comments noting strong client interest in learning more. “Lots of clients making investment and development decisions.” And “Strong interest in better performance and international competitiveness firmly on the agenda”. Results are consistent with accountants noting demand for advice.

Civil Construction/Infrastructure

Civil engineering comments are very positive, but some suggestion that a few projects may be getting deferred at the moment.


House building has peaked in Christchurch and there is open speculation of oversupply. But house construction is seen as very strong and rising in Auckland, Hamilton and Tauranga. In Christchurch nonresidential construction however is picking up. Skilled labour is in short supply and things are expected to get worse.

Construction Related

This is a diverse grouping of construction-affected businesses. Comments coalesce around strong activity up north, weakening down south. Some good regional insights are provided which generally other sections in our don’t deliver.


International education is very strong. Tertiary education is seen as tough – which is what the comments almost always are for this sector.


Oil and gas extremely weak on the back of low global oil prices and cutbacks in exploration. Retail energy demand however is seen as good.


Evidence of the lower NZ dollar starting to boost activity, helping offset dairy-related weakness. Finding staff is quite difficult. Slowing in Christchurch – boom over.


Dairy sector comments are astoundingly negative – except in one instance – the company focusing on value-added rather than bulk milk production. They are very optimistic. Wariness regarding potential El Nino weather pattern with some soils already dry. The beef sector is looking strong, sheepmeat could be better but not all that bad. Honey and venison good.

Farm Servicing

Weakness already evident in sales of tractors, farm bikes, farm machinery. Capital spending is falling away rapidly, but there are seen to be some people waiting in the wings to buy properties.

Financial Services

A very mixed bunch of comments including investors looking desperately for yield, home lending being busy (pick-up in the regions) but with demanding clients seeking discounts, some easing in business demand for financing of investments as confidence declines. Some anticipation of home credit demand easing soon in Auckland.


Very weak at the moment but quite a few respondents optimistic of things improving soon, especially with the fall in the exchange rate.


A very diverse range of comments have been captured in this section so summarising things is difficult. Positives include the lower NZD boosting exports, aging population boosting demand. Not too many negative comments.


A clear bright spot amongst the sectors and quite a contrast to dairying. Good comments regarding pipfruit, Kiwifruit, avocadoes, Happiness about the lower NZD.


Nothing too major but evidence of the Taranaki region’s weakness affecting businesses.

ICT – Information Communications Technology

A more mixed set of comments than seen before for this category. Some respondents are doing very well while others see a lot of weakness around them.


Nothing strong coming through. Some comments regarding rates easing off slightly.


All operators appear to be reasonably busy. Staff shortages continue.


Some operators are doing very well. Only a few comments regarding benefits from the lower exchange rate. Construction supplying firms still looking okay, wariness regarding dairy sector activity however.


The sector appears to be tough going at the moment except for one online information provider. A sign of the changes underway in the media sector probably.

Printing and Packaging

Lower NZD is raising costs, Australia still a bit tough though. Pullback in demand related to farming.

Property Development

Booming. The exact opposite of dairying. Auckland the strongest but some positive Wellington comments also.

Property Management/Investment

Strong investor and tenant demand in Auckland and Wellington, weak in Invercargill, weakening in Christchurch.

Property – Non-residential/Commercial

Mainly positive comments regarding rising rents, strong tenant demand, but as has been the case for some time Christchurch appears challenging and not for the faint-hearted.


The sector seems in good health but has produced far more positive comments in the past. Some caution appears to be creeping in even though candidate supply and suitability still seem constrained at the upper levels.

Residential Real Estate

Auckland is described as having crazy demand – but also some decrease in attendance at Open Homes, less obvious presence of Asian buyers, and seemingly a slight easing in price pressure with eyes toward the October 1 rule changes. Christchurch is getting sluggish. Hamilton and Tauranga are very strong, Hawkes Bay strengthening, Wellington improving, Rotorua active. Basically what has happened in previous cycles is well underway – buyers looking outside of Auckland following an Auckland boom.


Comments highly mixed but overall cautious with some respondents noting a recent weakening. Some wariness about how consumers will react to prices having to be raised because of the weaker currency.


Not as positive as one might expect based upon the falling exchange rate and surge in visitor numbers and spending in the year to March. Some wariness about business travel as NZ growth slows.

Transport and Storage

Winter is the usual quiet time. Auckland seems fine, but in the regions activity is being negatively affected by the dairy downturn. Overall comments are on the weakish side.


Activity levels appear to have eased slightly recently but no-one is overly despondent and plenty of respondents expect things to improve soon.


Basically in a good state. Strong positivism though no boom as one would write for property development for instance.

For a full and detailed account on Tony Alexander’s analysis: Download document pdf 587kb


Selwyn Manning, BCS (Hons.) MCS (Hons.) is an investigative political journalist with 23 years media experience. He specializes in reportage and analysis of socioeconomics, politics, foreign affairs, and security/intelligence issues. Selwyn has extensive experience as a commentator and has provided live political analysis to a wide range of television and radio organizations broadcasting in New Zealand, Australia and globally including the BBC (Five Live, London) and BBC (World Service). He is currently a correspondent to Australia's FiveAA radio, and is a regular live-on-air panelist on Radio New Zealand's The Panel with broadcaster Jim Mora.