New Zealand: Business confidence nears 15-year high
November 28, 2013
Confidence among businesses increased in November according to the ANZ Bank Business Outlook, which reported that a net 60.5% of businesses surveyed expect economic conditions to improve in the coming 12 months. The result came in above October's 53.2%. Business confidence now sits at the highest level since 1999 and remains well above the 0-percentage-point threshold that separates optimism from pessimism.
The monthly increase reflects more positive business sentiment across-the-board. In particular, the largest increase in confidence was registered in the retail sector, followed by increases in expected profitability and labor hiring, both of which hit a 19-year high. ANZ bank noted that the indicator is, "signaling the potential for annual economic growth of around 5 percent by mid-2014."
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