New Zealand: Business confidence gains momentum in November
November 29, 2010
Business confidence improved notably, as firms' perceptions about their own business and the general economy improved. According to the November business confidence index published by the National Bank of New Zealand, 33.2% of respondents to the survey expect better business conditions for the next twelve months. The reading is up 9.5 percentage points from last month's figure and represents the second consecutive improvement in confidence after five months of falling business sentiment. With the November improvement, business confidence moves further away from the 0-point threshold that separates optimistic from pessimistic sentiment. The results of the survey show the improvement in business confidence was broad-based, with optimism rising in all sub-components of the index. In particular, businesses' perception towards their own future activity continues to improve, with 35.3% of firms expecting better conditions in the next 12 months (October: 30.5% of firms). Firms also raised their investment expectations in the year ahead, with 6.6% of businesses expecting to invest in buildings, plants and machinery (October: 3.6% of businesses). The November results showed that, despite a strengthening New Zealand dollar, 20.8% of exporters expect overseas sales to increase. In addition, 11.5% of businesses plan to increase their staff over the next twelve months. The figure was up from the previous month when 7.6% of firms expected to hire more staff.
Author: Ricardo Aceves, Senior Economist