New Zealand: Business confidence hits 15-year high
December 18, 2013
Confidence among businesses soared in December according to the ANZ Bank Business Outlook, which reported that a net 64.1% of businesses surveyed expect economic conditions to improve in the coming 12 months. The result came in above November's 60.5%. Business confidence now sits at the highest level since February 1999 and remains well above the 0-percentage-point threshold that separates optimism from pessimism.
December's jump reflects more positive business sentiment across-the-board. According to ANZ, business confidence in agriculture surged to the highest point since July 1999. In addition, confidence in the manufacturing sector also hit its highest level in 15 years and confidence among businesses in the services sector reached levels that had not been seen since February 1999. Moreover, the December survey showed that firms' expectations for their own activity, which is a better predictor of economic activity, improved to the highest point since August 1994.
High levels of business confidence bode well for investment going forward. FocusEconomics Consensus Forecasts panelists expect fixed investment to grow 8.2% in 2013, which is up 0.7 percentage points from last month's estimate. For 2014, the panel sees fixed investment accelerating to 9.4%, which is up 0.3 percentage points from last month's projection.
Author: Ricardo Aceves, Senior Economist