New Zealand Business Confidence August 2018

New Zealand

New Zealand: Business confidence drops again in August; reaches an over-decade low

August 31, 2018

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.

FocusEconomics Consensus Forecast panelists expect fixed investment to grow 4.2% in 2018, which is up 0.2 percentage points from last month’s forecast, and 3.0% in 2019.

Author:, Economist

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New Zealand Business Confidence Chart

NewZealand Business Confidence August 2018 0

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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