More bad economic news


Finance minister Grant Robertson. Photo / Mark Mitchell

The government is denying that there is bad economic news out there. They simply aren’t listening as more news stories pile up about the state of the economy: Quote:

Kiwi investors have lost confidence about seeing increasing returns, with their expectations of term deposits contributing to a recent decline, according to ASB.

The latest ASB Investor Confidence Report found net investor confidence – the difference between those who thought return on investment would improve in the next year and those who thought it would get worse – fell from positive 21 per cent to positive 16 per cent over the three months to June. 

It’s a continuation of a downward trend that the bank has noticed since the start of 2017, though sentiment is far higher than the 3 per cent low witnessed at the start of 2016.

The majority of investors were still positive about seeing returns.

Twenty-seven per cent expected returns from their investments in the next 12 months to increase, 40 per cent expected returns to stay the same, and 12 per cent thought returns from their investments would decrease.

“Investor confidence has eased off the peak at the start of the year, but remains well above the levels of a couple of years ago,” said ASB senior wealth economist Chris Tennent-Brown.

Housing continued to be regarded as a good investment.  End quote.

Housing is seen as a good investment because people always need somewhere to live, and they always pay rent.  Quote:

The bank’s recent Housing Confidence Survey found investment in a family home was the regarded as the best money maker, with 23 per cent of respondents considering it the best option. Rental homes were also regarded positively, with 18 per cent rating it the option with the highest returns.

Term deposit expectations took a small dive over the last three months, according to the bank – from 13 per cent to 9 per cent reporting it as the best investment.

“Expectations regarding term deposit returns eased, which makes sense given how low term deposit returns have been,” Tennent-Brown said.

Term deposit rates have been between 2 per cent and 4 per cent.

“A number of KiwiSaver balanced and growth-focused funds will have posted returns far higher than this over the last few years,” he said.

“It continues to be disappointing to see quite low expectations regarding KiwiSaver and managed funds relative to term deposits.”

He said because the survey took place before the recent trims to some bank rates, and the Reserve Bank of New Zealand’s most recent interest rate announcement, there could be weaker confidence over the next three months. End quote.

Weaker confidence from investors leads to weaker confidence with the economy in general, which leads to a slow dow as business owners hold onto capital rather than spending. When staff leave they won’t be replaced, and confidence will slump further.

Grant Robertson won’t instil any confidence whatsoever.

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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet. Cam Slater doesn’t do quiet and, as a result, he is a polarising, controversial but highly effective journalist who takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him, you can’t ignore him.

To read Cam’s previous articles click on his name in blue.

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