New Zealand: Business confidence remains high despite slight decrease in March
March 31, 2014
Confidence among businesses decreased faintly in March according to the ANZ Bank Business Outlook, which reported that a net 67.3% of businesses surveyed expect better economic conditions in the coming 12 months. The result came in below February's 70.8%, which marked a 20 year-high. Nevertheless, business confidence is still well above the 0% threshold that separates optimism from pessimism.
According to ANZ, slightly lower levels of business confidence were recorded for 12 of the 15 categories that compose the business confidence indicator. ANZ did point out, however, that business confidence in all of the major economic sectors was above 50 points, which means that a broad-based expansion can be expected. Compared to the previous month, firms' expectations for their own activity, which is an even better predictor of economic activity, decreased only 0.51% to 58.2 points. Nevertheless, ANZ stated that none of the, “survey indicators points to an imminent turning point in the economy.”
High levels of business confidence signal good prospects for investment going forward. FocusEconomics Consensus Forecasts panelists expect fixed investment to grow 9.2% in 2014, which is down 0.1 percentage points from last month's estimate. For 2015, the panel sees fixed investment slowing to 6.4%.
Author: Armando Ciccarelli, Head of Data Solutions