New Zealand: Business confidence slides in June
June 30, 2014
Confidence among businesses fell in June according to the ANZ Bank Business Outlook, which reported that a net 42.8% of businesses surveyed expect better economic conditions in the coming 12 months. The result came in well below May’s 53.5%. Nevertheless, business confidence is still well above the 0% threshold that separates optimism from pessimism.
According to ANZ, lower levels of business confidence were recorded in 11 of the 14 categories that compose the business confidence indicator as well as in all of the economic sub-sectors except for retail. Firms’ expectations for their own activity, which is an even better predictor of economic activity, decreased from 51.0 points in May to 45.8 points. ANZ commented that, “[o]ptimists continue to significantly outnumber pessimists but overall business confidence is now well off its highs.” Regarding the potential reasons of the decline in business confidence, ANZ noted that, “[h]igher interest rates are the #1 suspect. Dairy and forestry export prices are sharply lower too. The housing market is levelling out. The NZD continues to defy gravity.”