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New Zealand's economy is expected to contract further and more people are expected to lose their jobs, a survey of businesses showed Tuesday.
The economy will contract in both the June and September quarters, according to key indicators in the latest New Zealand Institute of Economic Research (NZIER) quarterly survey of business opinion.
The survey showed over a third of firms reported a decrease in output or sales in the June quarter, pointing to another quarter of recession ahead.
And the NZIER predicts the unemployment rate will rise from the current 5.0 percent to 7.8 percent next year.
Over 30 percent of firms reduced employee numbers in the June quarter, with almost 20 percent intending to reduce staff in the next three months.
But confidence is on the up, insists NZIER chief executive Jean-Pierre de Raad.
"Businesses are less pessimistic than they have been in the past six months," he said in the report. "Fewer businesses expect a reduction in their own trading activity in the next three months.
"But the recession is not over yet. These latest data do not alter our view of a continued contraction until the December quarter."
New Zealand has been in recession since the beginning of last year, although some economists see a mild pick-up sometime in the second half of 2009.
In the March quarter, the net balance of firms reporting a fall in their own activity rose to 47 percent, the worst result for the indicator since at least 1970.
The latest survey showed a quarter of firms expected the general business situation to deteriorate. But this was an improvement from the 65 percent of firms with a pessimistic view in the survey for the March quarter.
For the September quarter, 10 percent of firms expect their own trading activity to shrink, compared with 36 percent expecting a decline in the previous survey.
Investment intentions remained negative but were better than in the previous three months with 29 percent of firms planning to invest less in buildings over the next year and 23 percent planning to spend less on plant and machinery.
