Is the sky falling?

Abstract

The NZIER has been collecting information about the confidence of New Zealand businesses since 1975. We publish the results in the NZIER Quarterly Survey of Business Opinion (QSBO). When we reported that business confidence had fallen dramatically in late 2017, the Government, the Opposition, the press and all the other economists in New Zealand had a view on what this meant. Depending on who you talked to, the results were meaningless, a harbinger of doom, another example of the vast right-wing conspiracy or an interesting example of the views of businesses that provided some insights into how parts of the economy were tracking. Our own take is the QSBO is an important measure when interpreted carefully, but shouldn’t be viewed in isolation of other data when making predictions. Given the level of interest in this topic, we have undertaken some more detailed analysis of the QSBO.