Supporting information:
Historical data (Excel spreadsheet)J6 Survey of expectations – a survey of businesses
Survey operation conducted by The Nielsen Company
March 2012 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 8 and Thursday 9 February 2012. 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 further
Expectations of annual Consumer Price Index (CPI) inflation fell this quarter. Respondents’ one-year mean expectations dived from 2.72 to 2.24 percent. The median fell to 2.20 percent. Mean and median expectations of the two-year series also tumbled - the two-year series mean and median now stand at 2.50 percent. In last quarter’s survey mean two-year-ahead CPI expectations were 2.82 percent. The latest official CPI figure from Statistics New Zealand, for the year to December 2011, is 1.8 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 March 2012 quarter, compared with 0.6 percent in the last survey. A quarterly increase of 0.5 percent is also predicted for the June 2012 quarter. These quarterly increases imply annual inflation rates of 1.5 and 1.1 percent respectively.
Easy monetary conditions are expected
Monetary conditions are currently perceived as being easy, and to remain relatively easy over the forecast horizon.
At the time the survey was completed the net percentage of respondents believing monetary conditions were easier than neutral was 33 percent. By June 2012 little change is expected, with a net 32 percent still expecting easier than neutral conditions. Looking further ahead to December 2012, more respondents expect some firming in monetary conditions to have occurred, however a net 20 percent of respondents still believe conditions will be easier than neutral.
GDP growth expectations little changed
Respondents’ expectations of real annual growth in gross domestic product (GDP) are little changed from last quarter. One-year GDP growth is expected to reach 2.1 percent, while at the two-year horizon, expected GDP growth remains at 2.6 percent. The latest Statistics New Zealand data indicates real production-based GDP increased by 1.9 percent between September 2010 and September 2011 (annual percentage change).
Positive near-term quarterly growth of 0.5 percent is expected for the December 2011 and March 2012 quarters.
Hourly earnings growth expectations have fallen
One-year-ahead hourly earnings growth expectations have fallen from 2.7 to 2.4 percent. The two-year series fell from 3.0 to 2.8 percent.
The unemployment rate is expected to fall
One and two-year expectations have risen slightly since last quarter, however these expectations remain lower than the latest official unemployment rate of 6.3 percent. The one-year series increased from 6.0 to 6.2 percent and the two-year series from 5.7 to 5.8 percent. The latest published official unemployment rate, for the December 2011 quarter, was 6.3 percent.
Slightly higher interest rates are expected.
The 90-day bank bill rate is expected to be 2.8 percent at the end of March 2012, which is a little higher than the rate prevailing at the time the survey was taken. By December 2012 respondents believe 90-day rates will have increased to 3.0 percent.
10-year government security yields are expected to be around 4.3 percent at the end of December 2012, implying a positive yield gap of 1.3 percent with the expected 90-day rate.
Exchange rates close to current levels are expected
A US dollar exchange rate of 0.82 is expected for the NZ dollar at the end of June 2012, and to be largely unchanged from this rate by December 2012. An Australian dollar exchange rate of 0.79 is predicted for the NZ Dollar at the end of December 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 63 percent out of a sample of 119. Of the completed questionnaires received by the cut-off date, the distribution across activity groups was:
|
Financial |
24 |
|
Business |
28 |
|
Agriculture |
8 |
|
Labour |
8 |
|
Other |
7 |
|
|
__ |
|
TOTAL |
75 |
|
|
|
Published 21 February 2012
