New Zealand: Business confidence bounces back in April
April 27, 2011
Business confidence increased in April, partly reversing March's fall. According to the business confidence index published by the National Bank of New Zealand (NBNZ), a net 14.2% of respondents to the survey expect better business conditions over the next 12 months, which was up 22.9 points over the March survey, when a net 8.7% of firms expected worse business conditions for the year ahead. The April print recovered more than half of the March drop, when the index fell by 43.2 points, reflecting the devastating effects of the earthquake that hit the country in February. With the April improvement, the index now sits above the 0-point threshold, which indicates that optimistic respondents outnumber pessimists. According to the NBNZ, the improvement was broad-based, in particular business' perceptions regarding their own activity over the next 12 months improved. Consequently, firms' profit expectations moved towards optimistic territory, compared to the previous survey. Moreover, residential investment prospects surged over the previous month, with a net 48.4% of businesses expecting better times ahead, compared to the 6.9% of respondents observed in March. Business investment expectations also improved, albeit less notably, with a net 6.1% of firms expecting to invest in buildings, plants and machinery in the following year, up from 5.8% of firms observed in March.
Author: Ricardo Aceves, Senior Economist