New Zealand: Business confidence improves notably in June
May 31, 2017
Economic sentiment among New Zealand businesses firmed up in June. The ANZ Bank Business Outlook indicator showed that a net 24.8% of surveyed firms expected better economic conditions in the next 12 months, which marked the best print since September 2016 and was significantly above May’s print of 14.9%. The increase has positioned the indicator further above the net-0% threshold that separates optimism from pessimism among firms, where it has been since October 2015.
The strong print observed in June reflects an across-the-board improvement in all sectors of the economy with agriculture leading the way. 43% of businesses surveyed expect better conditions for their own businesses, an improvement from last month and the highest reading in almost three year. Similarly, investment intentions rose and distanced itself further away from its average while employment intentions remained unchanged. Views on profit margins widened despite inflation expectations remaining anchored at 2.0%.
The report went on to add that the reading points to solid GDP growth in excess of 4%. Nevertheless, ANZ expressed their skepticism that the economy possessed the resources to achieve such high growth but said that “there is still a large gap between signaled growth and where actual GDP growth sits.”