Supporting information:
Historical data (Excel spreadsheet)J6 Survey of expectations – a survey of businesses
Survey operation conducted by The Nielsen Company
December 2011 quarter report
Introduction
The Reserve Bank of New Zealand (RBNZ) Survey of Expectations is a New Zealand-wide quarterly survey of business managers. The Nielsen Company conducts the survey on the RBNZ’s behalf. Respondents are asked for their expectations of future outcomes of a range of key macroeconomic data.
The latest RBNZ Survey of Expectations was conducted on Wednesday 9 and Thursday 10 November 2011. Note that the results of the survey represent expectations held by respondents and in no way represent the views or forecasts of the RBNZ. Graphs and figures in the following report refer to the mean expectation levels of respondents.
Summary of Results
Inflation expectations fall
Expectations of consumer price index (CPI) inflation fell this quarter. Respondents’ one-year mean expectations fell from 2.94 to 2.72 percent. The fall in the two-year series was small, just 0.04 percentage points, and it now stands at 2.82 percent. The median of the one-year series fell from 2.85 to 2.55 percent, while the two-year series median fell from 3.00 to 2.80 percent.
Respondents are also asked what they believe quarterly CPI inflation will be for the current and next quarters. A quarterly percentage increase of 0.5 percent is expected for the December 2011 quarter, compared with 0.7 percent in the last survey. A quarterly increase of 0.6 percent is predicted for the March 2012 quarter. These quarterly increases imply annual inflation rates of 2.7 and 2.5 percent respectively.
Firmer monetary conditions are expected
Monetary conditions are currently perceived as being easy, however an increasing number of respondents expect conditions to become tighter over the next year.
At the time the survey was completed the net percentage of respondents believing monetary conditions were easier than neutral was 21 percent. By March 2012 a net 8 percent of respondents expect easier than neutral conditions. Looking ahead to September 2012, an increased proportion of respondents – a net 10 percent – believe conditions will be tighter than neutral.
GDP growth expectations fall
Respondents’ expectations of real growth in gross domestic product (GDP) are less optimistic than last quarter. One-year GDP growth is now expected to reach 2.1 percent, which is a large drop from last quarters’ expectation of 2.9 percent. At the two-year horizon, expected GDP growth has fallen from 2.9 to 2.6 percent. The latest Statistics New Zealand data indicates real production-based GDP increased by 1.5 percent between June 2010 and June 2011 (annual percentage change).
Positive near-term quarterly growth of 0.5 and 0.6 percent is expected for the September 2011 and December 2011 quarters.
One-year hourly earnings growth expectations have fallen
One-year-ahead hourly earnings growth expectations have fallen from 2.9 to 2.7 percent. The two-year series fell from 3.1 to 3.0 percent.
The unemployment rate is expected to fall
One and two-year expectations have risen since last quarter, with both the one and two-year series increasing by 0.2 percentage points, to 6.1 percent and 5.7 percent respectively. However, respondents’ predictions remain lower than the latest published official unemployment rate for September 2011 of 6.6 percent.
Higher interest rates are expected.
The 90-day bank bill rate is expected to be 2.8 percent at the end of December 2011, which is a little higher than the rate prevailing at the time the survey was taken. However, by September 2012 respondents believe 90-day rates will have increased to 3.3 percent.
10-year government security yields are expected to be around 4.8 percent at the end of September 2012, implying a positive yield gap of 0.5 percent with the expected 90-day rate.
Exchange rates close to current levels are expected
A US dollar exchange rate of 0.79 is expected for the NZ dollar at the end of March 2012, and to be largely unchanged from this rate by September 2012. An Australian dollar exchange rate of 0.78 is predicted for the NZ Dollar at the end of September 2012, a little higher than where the rate was at the time the survey was completed.
Sample Composition
The response rate for this quarter was 72 percent out of a sample of 119. Of the completed questionnaires received by the cut-off date, the distribution across activity groups was:
|
Financial |
34 |
|
Business |
32 |
|
Agriculture |
7 |
|
Labour |
5 |
|
Other |
8 |
|
|
__ |
|
TOTAL |
86 |
|
|
|
Published 22 November 2011
