Retail confidence firm — survey

Press, 28 May 1984, Page 8

Retail confidence firm — survey

PA Wellington Retail confidence in the economy is firm and a further improvement in manufacturing output is likely, the National Bank says in its April monthly business outlook survey. Dealing with the retail sector, the bank says that from December to February the number of highly optimistic respondents eased, accompanied by a very high number expecting growth in the volume of business. “But over the last two months expectations have become recharged. In April a net 80 per cent of respondents . expected sales volumes to grow rather than contract With only 14 per cent of respondents expecting little change in the volume of business over the next 12 months the consensus is clearly one of expansion.” The bank says that in spite of this optimism there

is little evidence of any intention among retail respondents to raise stock levels. “The April survey revealed a remarkably balanced position. There was a small decrease in the percentage who thought stocks were too high but the number intending to raise stocks over the next six months was exactly balanced by those who intend to reduce them. “The buoyant state of confidence would surprise many observers. The easing of sales expectations from December to February fitted neatly the view that retailers would be in for a difficult period once the price frreeze ended and consumers had completed their purchases of big ticket items in anticipation of price rises. “Our respondents perceive the outlook to be somewhat brighter than that and it may be that real disposable incomes are following a stronger path than most observers believe.” The bank says that about 30 per cent of manufacturers surveyed in April considered finished stocks too low. This was a sharp increase over March and is the highest level for some time. Respondents who thought stocks were too

high recorded a third successive monthly decline. Hardly any of the respondents expect a sales contraction and exporters expect a further rise in export sales over the next six months. Referrring to opinions in the agricultural sector, the bank says market uncertainty has continued to provide an impetus to diversification with horticulture (mainly kiwifruit), and deer farming the popular alternatives. “Deer appear to be in strong demand through most of the country and income prospects from the sale of fawns remain good despite a recent setback in the Asian velvet market “The majority of those responding to our survey considered input prices stable at the moment. “However, over the next 12 months most expect rising costs, a cause of much concern in the absence of any expected improvement in incomes.”