Goldsmith Paul: Questions for Oral Answer — Questions to Ministers Questions to MembersText is incorporated into the Bound VolumeGoldsmith Paul: Questions for Oral Answer — Questions to Ministers Questions to Members[Sitting date: 02 July 2013. Volume:691;Page:11411. Text is incorporated into the Bound Volume.]3.PAUL GOLDSMITH (National)to theMinister of Finance: What reports has he received on business and economic conditions in New Zealand?Hon BILL ENGLISH (Minister of Finance):Last week the ANZ issued its business outlook survey for June. After a bit of a flat patch which the Leader of the Opposition acknowledged at the weekend the survey confirmed business confidence continued to lift across all sectors. The majority of component indicators are also rising. A net 50 percent of businesses expect general business conditions to improve over the next year. There were strong readings in construction in agriculture and in manufacturing which posted a significantly higher reading for the outlook than a year ago.Paul Goldsmith: What did the latest business outlook survey report about businesses’ views about prospects for their own operations over the next year?Hon BILL ENGLISH: The survey confirmed that firms remain upbeat about prospects for their own businesses as well as for the wider economy. A net 45 percent of businesses expect better times over the year ahead for themselves. Similar positive themes were apparent across the rest of the survey. For instance profit expectations are the highest since April 2010. Among the best news in the survey is that a net 17 percent of firms expect to increase employment the highest reading in 2 years. Investmentintentions are at their highest level since late 2003. Even excluding the construction sector optimism is widespread with a net 48 percent of firms outside of construction expecting better times ahead so the positive views are not all driven by construction.Paul Goldsmith: What reports has he received on the employment intentions of businesses in light of the general pick-up in business conditions?Hon BILL ENGLISH: The Westpac McDermot Miller Employment Confidence Index was issued this week—it increased for the fourth quarter in a row. The index now stands at cautiously optimistic levels—the highest levels since September 2011. The improvement in employment confidence is not surprising following employment statistics showing that the unemployment rate is falling. The report also noted that the official data can be volatile and job opportunities and the net percentage of people reporting wage increases have picked up. However these levels remain low by pre-recession standards and there is much more work to do to see the better outlook for business confidence actually translated into more jobs and higher incomes.Hon David Parker: Has he been advised that the most recentANZ Job Ads data shows job advertisements declining a seasonally adjusted 3.8 percent in May which according to the ANZ “would be consistent with a sharp recoil in the unemployment rate”; if he has not seen that has he seen the statistics from Statistics New Zealand that show that 44 percent of all working New Zealanders got no wage increase in the last year?Hon BILL ENGLISH: I have seen those statistics which is why I made the point that the indicators are cautiously optimistic and I would emphasise the caution. Employment indicators have over the last 2 or 3 years been more volatile than was historically the case. However in the light of forecasts of 2 to 3 percent growth in the economy and rising business confidence the outlook for employment continues to improve rather than deteriorate.Paul Goldsmith: If the Minister had to name one sector that has contributed to the more positive outlook for business conditions and the economy what would that sector be?Hon BILL ENGLISH: There are any number of sectors I could point to that have contributed. Some of them are totally opposed by the Opposition such as the oil and gas sector. But one that has had its attention is the manufacturing sector so I thought I would pick that one. Since the beginning of 2009 the manufacturing sector as a whole has grown by 9.2 percent—Hon Dr Nick Smith: How much?Hon BILL ENGLISH: —9.2 percent—as measured by GDP by industry. However there was scope for it to grow because—Andrew Little: How much did it fall in 2008-09?Hon BILL ENGLISH: That is a very good point. In 2008 under the Labour Government it shrank by 12 percent. [Interruption ]Mr SPEAKER: Order!