The economy needs oxygen. Business confidence has retreated. A net 43 percent expect worse times over the year ahead, down from a net 38 percent last month. These are findings from the economists from the National Bank.

It is the trend in how firms feel about their own business that is most disconcerting. Firms' own activity expectations have sunk deeper into the red. A net 8 percent expect conditions for their own business to worsen over the coming year. Not since 1988, and the start of the survey, have we seen five successive months where firms' own activity expectations have been negative. While the rural heartland and confidence towards agriculture remain positive, it's a sea of red ink across retailing, manufacturing, construction and services.

Employment intentions have slipped once again. A net 14 percent expect fewer employees over the year ahead. To be fair, it's a small move, down 2 percentage points from last month, but there's been a clear trend now since late 2007. Employment sentiment is uniformly negative across the five major sub-groups. Investment intentions slipped another percentagepoint this month with a net 4 percent expecting less investment over the next 12 months. Profit expectations, residential and commercial investment intentions are all down. The one note of optimism in thesurvey was a slight uptick in export intentions. Praise be a lower NZD/AUD.

Survey Results

This Month        Previous Month        
Business Confidence                    -43.2                -38.7       
Activity Outlook                              -8.2                  -4.0   
Exports                                         16.5                 14.5
Investment                                    -3.8                  -2.6
Livestock                                       1.8                  -3.5
Capacity Utilisation                       -2.7                   1.3       
Residential Construction             -26.3                -21.1           
Commercial Construction            -30.0                -14.3           
Employment                               -13.6                -11.9
Unemployment Rate                   79.6                 74.6       
Profits                                        -27.1                -18.9
Interest Rates                           -42.3                -34.8   
Pricing Intentions                       43.0                 41.2       
Inflation Expectations                  3.67                3.49

The above means in my opinion that the Governemtn should take note of what is happening in the real world out there. The Government has been advised on numerous occasions by various organisations and authorities to cut, for example, taxes on petrol. They have been advised to act on the continuous increase in petrol prices. Bear in mind that the Goverment still continues to pocket the extra tax received from the increases in the petrol prices. Would it not be more advantages for companies that tax on petrol is capped, ie above a certain amount tax would not increase?