New Zealand: Business confidence rises to 12-month high
May 31, 2011
Business confidence increased in May, fully recovering from the post-quake decline. According to the business confidence index published by the National Bank of New Zealand (NBNZ), a net 38.3% of respondents to the survey expect better economic conditions over the next 12 months. The result was up 24.1 points over the April survey, when a net 14.2% of businesses expected better business conditions for the year ahead and more than reversed the post-quake decline in business sentiment in March. With the May print, the index rose further above the 0-point threshold, which indicates that optimistic respondents outnumber pessimists. According to the NBNZ, the improvement was broad-based, with all sub-indicators rising above their long-term averages. Firms' perception of their own activity over the next 12 months improved by 10 points, with a net 39.7% of businesses expecting better times ahead. The reading now sits at levels last seen in May 2010. In addition, the survey showed that a higher number of firms expect profits to increase over the next 12 months. The monthly improvement also reflected that a greater number of businesses intend to increase staff as well as to boost investment in the year ahead.
Author: Ricardo Aceves, Senior Economist