New Zealand Business Confidence

New Zealand

New Zealand: Business confidence inches down; stays in optimistic territory

December 19, 2014

Confidence among businesses inched down in December, according to the ANZ Bank Business Outlook, which reported that a net 30.4% of businesses surveyed expected better economic conditions in the coming 12 months. The result, which came in slightly below November’s 31.5%, represented the first drop after two increases. Nevertheless, business confidence still remains far above the 0% threshold that separates optimism from pessimism.

According to ANZ, business confidence moderated in 9 of the 14 categories that compose the index. While the largest drop was recorded for the agricultural sector, the biggest lift was recorded for construction. Firms’ expectations for their own activity, which is an even better predictor of economic activity, decreased from 41.7 points in November to 37.3 points in December. According to ANZ, December’s print, “continues to signal strong growth and low inflation; the Goldilocks run continues,” and reflects that, “the New Zealand economy has been in a sweet spot for some time now.”

FocusEconomics Consensus Forecasts panelists expect fixed investment to grow 7.1% in 2015, which is up 0.6 percentage points from last month’s estimate. For 2016, the panel sees fixed investment slowing to 4.9%.

Author: Teresa Kersting, Economist

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New Zealand Business Confidence Chart

New Zealand Business Confidence December 2014

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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