New Zealand Business Confidence July 2016

New Zealand

Business confidence weakens in July

Economic sentiment among New Zealand businesses fell in July after three consecutive months of improvement. The ANZ Bank Business Outlook indicator showed that, in July, a net 16.0% of surveyed firms expected better economic conditions in the next 12 months. The number of businesses with this positive view in July was lower than the 20.2% recorded in June. Despite the decline, the business confidence indicator remains above the 0%-threshold that separates optimists from pessimists.

ANZ said that July’s print mainly reflected a moderation in economic sentiment in the construction and services sector. Meanwhile, confidence among firms in the agricultural sector remain depressed. Nonetheless, ANZ noted that the mild drop in July reflected purely seasonal factors and that, “business sentiment itself however, often masks what is happening across the general economy.” ANZ went on to say that businesses’ own activity expectations continue to suggest robust growth.

FocusEconomics Consensus Forecasts panelists expect fixed investment to grow 3.7% in 2016, which is down 0.5 percentage points from last month’s estimate. For 2017, the panel sees fixed investment accelerating to 3.5%.

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New Zealand Business Confidence Chart

New Zealand Business Confidence July 2016

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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