New Zealand: Business confidence picks up in February but remains in negative territory
Economic sentiment among New Zealand businesses improved at the start of 2018 from December’s dire reading, although firms remained generally pessimistic. The ANZ Bank Business Outlook indicator showed that a net 19.0% of surveyed firms were pessimistic about the year ahead in February, up markedly from December’s minus 37.8% (the survey is not conducted in January). As a result, the indicator moved closer to the net-0% threshold that separates optimism from pessimism among firms.
During the month, firms outlook regarding their own activity—a metric which has a stronger correlation to GDP growth—also improved. In addition, businesses grew more positive regarding exports, investment, employment and profits. On the downside, a sizeable number of firms still foresee credit difficulties. Sentiment improved across all five sectors covered—agriculture, manufacturing, retail, construction and services—with retail the closest to optimistic territory. This is likely influenced by low inflation and a strong labor market, both factors which are encouraging consumers to splash more cash.