New Zealand: Business confidence rises to highest level in more than a year
July 27, 2011
Business sentiment continues to improve, amid ongoing construction efforts. According to the business confidence indicator published by the National Bank of New Zealand (NBNZ), in July, a net 47.6% of firms expect better business conditions over the next 12 months. The monthly reading was up 1.1 points over the June survey, when a net 46.5% of businesses expected better times in the year ahead and represented the highest level in more than a year. As a result of the July improvement, the index moved further above the 0-point threshold, which indicates that optimistic respondents outnumber pessimists. According to the survey, business sentiment improved across all sectors, particularly in the construction sector, with a net 59.5% of firms expecting better business conditions in the next 12 months. Moreover, firms' perception of their own activity for the year ahead improved compared to the previous month, benefiting from rising profit expectations, which were up 4.3 points over the previous month. In addition, business investment expectations improved, with a net 17.9% of respondents expecting better times in the year ahead to invest in buildings, plants and machinery in the next 12 months. The reading was up from the previous month's net 15.4% of respondents.
Author: Ricardo Aceves, Senior Economist