New Zealand: Business confidence drops again in August; reaches an over-decade low
The ANZ Bank Business Outlook indicator showed that a net 50.3% of surveyed firms were pessimistic over general business conditions in the year ahead in August, a higher proportion than July’s 44.9% and marking the lowest reading since April 2008.
As a result, the indicator moved further below the net-0% threshold that separates optimism from pessimism among firms. Confidence declined in all surveyed industries but construction, where it improved compared to the previous month. Sentiment deteriorated the most in the retail and agriculture sectors.
Meanwhile, firms’ positive outlook regarding their own activity—a metric which has a stronger correlation to GDP growth—remained steady at July’s 3.8 points, the lowest level since May 2009. Firms’ intentions to invest and hire additional workers experienced a marked decline. Profit expectations remained unchanged and a sizeable number of firms still foresee credit difficulties ahead.