New Zealand: Business confidence dips marginally in October
November 1, 2016
Economic sentiment among New Zealand businesses declined in October. The ANZ Bank Business Outlook indicator showed that a net 24.5% of surveyed firms expected better economic conditions in the next 12 months, which was slightly below September’s 17-month high of a net 27.9% increase. Despite the decline, the indicator remains above the 0% threshold that separates optimists from pessimists.
According to ANZ, October’s reading should not cause significant concern since it is the second highest reading of this year and businesses remain upbeat about the country’s macroeconomic fundamentals. Businesses in October were optimistic about the economy, profitability, employment and their own prospects. At sector level, businesses in the services and construction sector were more upbeat. However, firms reported that accessing credit and labor is becoming more difficult and intentions to invest eased somewhat. Nevertheless, ANZ considers that the economy “has plenty of momentum” and that the less upbeat assessment reflects a normal business cycle.