New Zealand: Business confidence dips slightly in August
August 31, 2017
Economic sentiment among New Zealand businesses weakened in August. The ANZ Bank Business Outlook indicator showed that 18.3% of surveyed firms expect better economic conditions in the next 12 months, which marked a decline from July’s 19.4%. Despite the drop, the indicator remains above the net-0% threshold that separates optimism from pessimism among firms, where it has been since October 2015.
The drop observed in August should not be interpreted as a decline in overall confidence, however. In seasonally-adjusted terms, business confidence actually increased. Taking a closer look at the details of the report, a net 38% of businesses expect improving economic conditions, which is above the long-run average of 28%. Adjusted for seasonality, the subcomponent increased by a notch (from 45% in July to 46%). Similarly, profit expectations and commercial and residential construction intentions rose notably. In contrast, intentions to increase staffing waned to the lowest level in over a year, but nonetheless remained above the series average.
The report went on to add that the latest business confidence reading is positive and attests to a broad-based economic expansion because, “We’re seeing healthy readings for confidence, activity expectations, profitability, investment and employment across all sectors and regions.”