New Zealand Business Confidence

New Zealand

New Zealand: Business confidence continues downward trajectory but remains in optimistic territory

July 31, 2014

Confidence among businesses fell in July, according to the ANZ Bank Business Outlook, which reported that a net 39.7% of businesses surveyed expect better economic conditions in the coming 12 months. The result came in below June’s 42.8% and represented the fifth consecutive monthly decline. Nevertheless, business confidence is still well above the 0% threshold that separates optimism from pessimism.

According to ANZ, business confidence fell in 4 of the 14 of the categories that compose the index, with commercial construction tallying by far the largest drop. Firms’ expectations for their own activity, which is an even better predictor of economic activity, decreased from 45.8 points in June to 45.1 points in July. In addition, lower levels of business confidence were recorded in all economic sectors except for manufacturing. ANZ commented that, “[o]ptimists continue to significantly outnumber pessimists but overall business confidence continues to wane.” Furthermore, ANZ explained that, “[w]ilting sentiment (from high levels) but mixed nuances in the detail is consistent with an economy that is transitioning into a more sustainable economic expansion.”

FocusEconomics Consensus Forecasts panelists expect fixed investment to grow 10.1% in 2014, which is up 0.2 percentage points from last month’s estimate. For 2015, the panel sees fixed investment slowing to 7.1%.


Author: Teresa Kersting, Economist

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New Zealand Business Confidence July 2014

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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