The September NZIER Quarterly Survey of Business Opinion told us that businesses were more confident in September (than in June). However, they also experienced less activity started laying off workers and are still facing record cost pressures (ht NZIER). The decline in firms activity was the sharpest since March 1991!
Although this isn’t wildly out of line with the National Bank results – it is weaker. Overall, the poor own activity result implies that GDP could easily fall in September and December – a whole year long recession. This definitely shoots my pick of a September month pick-up in economic activity out of the water (*). Although, I still don’t believe that December will be a negative quarter – and I’m not convinced that we haven’t hit a bottom, a bottom that we will stay around for a little while, but a bottom none the less (note this is something I would like to discuss if anyone wants to talk about it in comments).
My advice is still, watch commodity prices, watch interest rates. The difference between a slightly bigger than 1997/98 style recession (as a result of the tanking housing market) and a 1991/92 style recession will be commodity prices.