New Zealand Business Confidence

New Zealand

Business confidence falls to over-six-year low in August

Confidence among businesses fell in August, according to the ANZ Bank Business Outlook, which reported that a net 29.1% of businesses surveyed expected worse economic conditions in the coming 12 months. The figure, which came in below July’s 15.3% of respondents expecting worse economic conditions, represented the worst result since March 2009. As a result, business confidence moved further below the 0% threshold that separates optimism from pessimism.

According to ANZ, business confidence decreased in all of the 14 categories that compose the index, with the exception of the residential construction. Firms’ expectations for their own activity, which is an even better predictor of economic activity, decreased from 19.0 points in July to 12.2 points in August. The agricultural sector recorded the largest fall over the previous month, resulting from a high New Zealand dollar and low dairy prices. According to ANZ, August’s survey results indicate that it, “portrays a very sluggish economy.”

FocusEconomics Consensus Forecasts panelists expect fixed investment to grow 7.6% in 2015, which is up 0.2 percentage points from last month’s estimate. For 2016, the panel sees fixed investment slowing to 4.6%.

Author:, Economist

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New Zealand Business Confidence Chart

New Zealand Business Confidence August 2015

Note: Percentage of respondents expecting improvement in general business conditions minus percentage expecting deterioration. An index number above 0 indicates that optimists outnumber pessimists. The survey is not conducted in January.
Source: ANZ Bank Business Outlook.

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