By Lucy Craymer
WELLINGTON (Reuters) - New Zealand's business confidence in the second quarter continued to pick up from low levels but firms remain downbeat, a private think tank said on Tuesday.
A net 63% of firms surveyed expected general business conditions to deteriorate compared with 66% pessimism in the previous quarter, the New Zealand Institute of Economic Research's (NZIER) quarterly survey of business opinion (QSBO) showed.
On a seasonally adjusted basis, 59% expected business conditions to worsen, versus 63% pessimism recorded in the previous period. The survey's measure of capacity utilization fell to 81.7%, from the previous quarter's 94.0%.
NZIER said while demand continues to soften, the marked decline in capacity utilization amongst builders and manufacturers and the proportion of firms reporting difficulty in finding labour, especially unskilled labour, point to a considerable easing in capacity pressures in the New Zealand economy.
The downbeat mood was broad-based across sectors, but retailers are particularly bearish about the general economic outlook, NZIER said in its report.
“Overall, we’re seeing that softer demand picture coming through,” Christina Leung, principal economist at NZIER said at the release of the survey. She added it should give the central bank some comfort that things are going in the right direction.