New Zealand: Business confidence hits 20-year high
February 28, 2014
Confidence among businesses jumped in February according to the ANZ Bank Business Outlook, which reported that a net 70.8% of businesses surveyed expect better economic conditions in the coming 12 months. The result came in above December's 64.1% (the survey is not conducted in January). Business confidence now sits at the highest level since March 1994 and remains well above the 0% threshold that separates optimism from pessimism.
According to ANZ, higher levels of business confidence were recorded in all sectors of the economy. In addition, firms' expectations for their own activity, which is a better predictor of economic activity, improved notably compared to the previous month and reached the highest level since June 1994.
High levels of business confidence bode well for investment going forward. FocusEconomics Consensus Forecasts panelists expect fixed investment to grow 9.3% in 2014, which is up 0.3 percentage points from last month's estimate. For 2015, the panel sees fixed investment slowing to 6.3%.
Author: Ricardo Aceves, Senior Economist