New Zealand Business Confidence August 2017

New Zealand

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.”

FocusEconomics Consensus Forecasts panelists expect fixed investment to grow 4.7% in 2017, which is up 0.2 percentage points from last month’s estimate. For 2018, the panel sees fixed investment expanding 3.4%.


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NewZealand Business Confidence August 2017

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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