Builders upbeat, farmers worry

RICHARD MEADOWS
Last updated 07:35 10/01/2013
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FAIRFAX NZ
Federated Farmers president Bruce Wills is not surprised that farmer confidence is down.

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Confidence among the nation's farmers and small agricultural firms has hit rock-bottom but builders are increasingly buoyant as the Christchurch reconstruction gets under way.

ANZ's latest Business Micro Scope survey of small businesses showed sentiment in the agricultural sector retreated into negative territory in the last quarter for the first time since June 2009.

It was measured at a net negative 5 per cent, the lowest level since the bank began collecting comparable data in 2007.

Federated Farmers president Bruce Wills was not surprised by the result.

"The sheep and cattle sector, in particular, has experienced a sharp reversal in returns in the last six or so months," he said.

Wills said farmers faced headwinds caused by the strong currency and increased regulation, such as the "onerous and restrictive" requirements of the One Plan instigated by Horizons Regional Council.

"What that does is it knocks confidence severely, and it also increases costs substantially."

However, he said it was not all doom and gloom, with global population growth and a burgeoning middle-class in Asia expected to give the industry a boost in the medium-to-long term.

Overall sentiment across New Zealand small business eased slightly during the last quarter of 2012 to a net 11 per cent, but was still ahead of the long-term average of 9 per cent.

Low turnover, competition, regulation and the high exchange rate were cited as significant issues by those surveyed.

ANZ business banking managing director Fred Ohlsson said it was still a challenging environment to operate in.

The construction sector bucked the trend, climbing to its highest level of confidence since 2007.

Investment and hiring intentions among builders, plumbers, electricians and gasfitters soared to a 13-year high.

"Small building firms and tradespeople see a good year ahead with the Christchurch rebuild and a wider property upturn underpinned by low interest rates," Ohlsson said.

Although the heat was centred on Canterbury and Auckland, he said there was evidence the optimism was spreading to other regions and sectors.

The ANZ Micro Scope is based on activity, employment, investment and profitability, and reflects the net balance of positive and negative responses from respondents. Fairfax NZ

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