New Zealand Business Confidence September 2018

New Zealand

New Zealand: Business confidence gains ground from over-decade low in September

September 26, 2018

The ANZ Bank Business Outlook indicator showed that a net 38.3% of surveyed firms were pessimistic over general business conditions in the year ahead, a smaller proportion than August’s over-decade worst reading of 50.3%. As a result, the indicator moved closer up to the net-0% threshold that separates pessimism from optimism among firms. Sentiment improved in all sectors but agriculture, where it weakened slightly compared to August. Nonetheless, business confidence remains weak overall.

Meanwhile, firms’ positive outlook regarding their own activity—a metric which has a stronger correlation to GDP growth— climbed to 7.8 points in September from 3.8 points in August, which had marked the lowest level since May 2009. Despite the improvement, however, the index remains well below the long-term average of 27.0 points. Firms’ profit expectations and their intentions to hire additional workers rose modestly in September but their intentions to invest deteriorated further from the previous month. Meanwhile, a sizeable number of firms still foresee credit difficulties ahead.

FocusEconomics Consensus Forecast panelists expect fixed investment to grow 4.7% in 2018, which is unchanged from last month’s forecast. For 2019, the panel expects fixed investment to expand 3.3, unchanged from last month’s estimate.

Author:, Economist

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New Zealand Business Confidence Chart

NewZealand Business Confidence September 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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