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: Ricardo Aceves, Senior Economist