New Zealand Business Confidence

New Zealand

New Zealand: Business confidence rises to levels last seen in 14 years

July 31, 2013

Businesses are more confident in July according to ANZ, which reported that a net 52.8% of respondents to its monthly survey expect economic conditions to improve in the next 12 months. This result is well above the 50.1% reported in June and marks the most optimistic response recorded since April 1999. With the July increase, business confidence rises further above the 0-point threshold of optimism versus pessimism.

According to ANZ, business sentiment is high across the board, especially in construction, services and retail. Manufacturing - the sector with the lowest level of optimism this month - improved notably over last month. ANZ noted that the results suggest a broader expansion of the economy. That said, businesses' own expectations for activity, which are a better predictor of economic activity, did ease slightly in July after having reached a three-year high in June.

High levels of business confidence bode well for investment going forward. FocusEconomics Consensus Forecasts panellists expect fixed investment to grow 7.8% in 2013, which is up 0.3 percentage points from last month's estimate. For 2014, the panel sees fixed investment accelerating to 8.3%.

Author:, Senior Economist

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New Zealand Business Confidence Chart

New Zealand Business Confidence July 2013

Note: Percentage of respondents expecting improvement in general business conditions minus percentage expecting deterioration. An index number above 0 indicates that optimists outnumber pessimists, while a number under 0 indicates more pessimists than optimists. The survey is not conducted in January.
Source: National Bank of New Zealand.

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