New Zealand: Business confidence falls in May amid rising uncertainty
May 31, 2012
According to the May business confidence indicator published by the National Bank of New Zealand (NBNZ), a net 27.1% of respondents to the survey expect better economic conditions in the next 12 months. The print was down 8.7 points over the April reading and represents, in fact, the lowest level of business sentiment so far this year. Despite the drop, the index remains above the 0-point threshold, which indicates that optimistic respondents outnumber pessimists. According to the Bank, business confidence dropped in May amid firms' growing fears about the uncertain situation in Europe and prospects for the global economy. The deterioration was broad-based, as confidence fell in four out the five sectors surveyed. Consequently, businesses' own activity expectations edged down over the previous month, suggesting that companies are likely to be more cautious about their investment intentions in the next 12 months, with only a net 12.4% of respondents expecting better conditions for investing in buildings, plants and machinery over the next year.
Author: Ricardo Aceves, Senior Economist