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WELLINGTON, Jan 17 (Reuters) – New Zealand business confidence fell to its lowest level since 1974 in the fourth quarter of last year, as companies struggled with higher interest rates, spending pressures and soft demand, a private think tank said on Tuesday.
The New Zealand Institute of Economic Research’s (NZIER) Quarterly Business Opinion (QSBO) survey found that 70% of companies expected overall business conditions to deteriorate, compared to 42% pessimism last quarter.
He added that business confidence is at its lowest level since 1974, the weakest on a seasonally adjusted basis since the survey began in 1970.
On a seasonally adjusted basis, 73% expect business conditions to worsen, compared with 43% pessimism in the previous period. The survey’s measure of capacity utilization fell to 93.7 percent from 94.5 percent in the previous quarter.
The NZIER survey was conducted following a more hawkish than expected central bank meeting in November and this weighed on sentiment.
Builders and retailers were the biggest losers in the December quarter. Firms have become more cautious and are now looking to reduce staff and investment plans, NZIER said in the report.
A net 81% reported additional spending in the December quarter.
Editing by Matthew Lewis, Wellington Report by Lucy Kramer
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