New survey: Business confidence falls to lowest since 2008
Business confidence continues to slide according to the latest ANZ Business Outlook Survey.
Business confidence, and firms’ views of their own activity, continued to fall in July, reaching the lowest levels since May 2008 and May 2009 respectively, ANZ chief economist Sharon Zollner said.
This was increasing the risk of the economy stalling, she said.
Business confidence dropped to a net 45 per cent of respondents reporting they expect general business conditions to deteriorate in the year ahead, down 5 points.
What the collapse in business confidence really says is the entire entrepreneur class of NZ relied on mass immigration, low wages and an underfunded social infrastructure – this is why neoliberal capitalism is a failure.
As Business tell us they have no confidence the NZ stock market hit 9000 at the beginning of the month…
…look at all that lack of confidence.
Who knew our mighty Titans of Commerce were the real snowflakes and all it took was fair wages, decent working conditions and a woman in charge to destroy their fortitude!
I take it they would like to go back to the good old days of their high confidence – you know when we had record homelessness, sky rocketing suicide & dirty politics.
Could we please start a give a little page to raise funds to buy every one of them 3 years worth of viagra for this sudden loss of rugged free market self-reliance?
Do they need a trigger free safe space with no references to universal suffrage and democratic majorities?
Shouldn’t we all be concerned that our mighty Entrepreneur class only have high confidence when they’re fucking over workers and people are living in cars?
Let’s put aside our incredulousness at the sudden lack of confidence by our mighty business leaders and look at the 3 real reasons why business confidence in NZ is plummeting.
1: Echo Chambers
Remember when right wing fixer Jordan Williams bet that he would walk down the main street of Wellington naked if Winston didn’t go with National? This false certainty was an example of how highly polarised NZ is now as a culture, with few broad platform media outlets able to give a wide enough perspective of what is really happening. We have mistaken a small population for a connected one.
The reason business are reeling was because they honestly believed their own echo chambers and didn’t think Labour, the Greens or NZ First could get to 51%. They have no real excuse for this level of ignorance because the moment the election result came in, it was always abundantly clear to anyone who had actually read NZ First’s policy platform that Winston was always going with Labour. Also, any basic understanding of the special votes always concluded Labour & the Greens were the ones who would pick up numbers.
So the first reason why business confidence has been shaken is because they were genuinely blindsided by the result, and a spooked business community loses confidence.
2: Wilful Spite
The second reason why NZ Business confidence is plummeting is pure ideological spite. There are rich elements within NZ who despise the Left with the kind of hatred of communism that McCarthy would feel embarrassed expressing in public. They are the same forces who triumphed over Helen Clark during the Winter of Discontent when the same elites forced Helen to dump closing the gaps policy.
Remember, there was no real reason at all to force Clark’s Labour Government to dump the closing the gaps policy, it was a pure domination move to let the Labour Government know the business elites, not Helen’s Government, were the ones in charge.
Brutally strangling social justice policy aimed at lifting Māori out of the depths of poverty meant Labour wouldn’t dare tamper with the neoliberal settings of the economy.
Those same forces are at work in purposely spiking business confidence now. This is why Grant Robertson has been so fastidious in keeping the spending promises in place, despite the grotesque underfunding of the last 9 years under National. Any opportunity to attack will be seized upon by these elites and the new Government are doing everything in their power to limit those targets.
The truth is that this most malicious element within the business community won’t be sated by anything other than the total destruction of everything Jacinda represents.
The Government should quietly note those who are causing the most venom and with cold blooded precision, nail those captains of Industry with specific taxes or expensive regulation. For these players of the game, there can only be a ruthless response, because you can’t negotiate with cancer.
3: Correct analysis of the looming meltdown
Of course the third reason why NZ Business confidence is tanking is because they are correctly reading the external economic signs of the impending reckoning.
Central banks around the world responded to the Global Financial Recession by printing billions and pumping them into stocks and bonds. This falsely created the lowest inflation rate in 5000 years. The entire last decade of growth has been built on hope wrapped in snot. When the collapse comes, it will have the force of a possible depression…
Comment: World at risk of a borrowing hangover
World debt ratios have spiralled to record levels during the era of super-easy money and markets are showing telltale signs of late-cycle excess, leaving the international financial system acutely vulnerable to a jump in borrowing costs.
Any reversal in our fortunes could be “quick and sharp”, says the Bank for International Settlements, the global watchdog based in Switzerland and the scourge of dissolute practice.
The warnings cascade from the BIS’s annual report released over the weekend, always a sobering read for investors and central bankers alike.
Europe’s ‘death wish’ has never been stronger
Emmanuel Macron’s “grand plan” to relaunch the euro on safer foundations lies in tatters after Europe’s northern bloc refused to contemplate any form of fiscal union, and exhausted leaders kicked the crucial issues into touch.
After battling deep into the night over migration there was no energy left at the Brussels summit for a fight over fiscal architecture.
The paralysis means that Europe is likely to stumble into the next global economic downturn disastrously ill-equipped. It will have no shared fiscal instruments of any scale to fight recession, leaving the weakest states vulnerable to collapse.
Could New Zealand’s economy survive a China crisis?
In July 2018 China’s economy falters sending shockwaves through the global banking sector. Commodity prices plunge and the world faces its first global financial crisis since the meltdown of 2008.
What happens next is pretty ugly for most New Zealanders – job losses, soaring mortgage rates, falling house prices and a sharp recession.
As a forecast it would be unnecessarily gloomy, although not implausible.
But the grim situation painted by NZ Treasury is not meant to be a prediction – it is a model designed to offer a stress test of our economy under extreme conditions.
A Chinese financial crisis is one of three “large but plausible shocks” modelled by Treasury in its 2018 Investment Statement, along with a major Wellington earthquake and an outbreak of foot and mouth disease.
…so those are the three forces feeding into our falling business confidence. Ignorance of the wider electorate, wilful idealogical spite and a sober reading of the economic indicators warning of a meltdown.
That’s a potent cocktail of grief right there and it will be up to the Government to provide the leadership our mighty captains of industry have walked away from.
As if Jacinda didn’t have enough on her plate.