New Zealand: Business confidence softens in July
July 31, 2017
Economic sentiment among New Zealand businesses declined in July. The ANZ Bank Business Outlook indicator showed that a net 19.4% of surveyed firms expected better economic conditions in the next 12 months, which marked a decline from June’s 24.8 points. Despite the drop, the indicator remains above the net-0% threshold that separates optimism from pessimism among firms, where it has been since October 2015.
The drop observed in July largely reflects seasonal factors and should not be interpreted as a decline in overall confidence. Although businesses’ expectations dropped by 3% to 40% in July, the reading marks the second highest this year and actually increased if adjusted for seasonality. Intentions to export rose to the highest print since April 2017 and remained well above average for investment. In contrast, residential construction and commercial construction intentions fell and profit expectations dropped but remained above average.
The report went on to add that the latest business confidence reading is a “testament to the wide array of drivers across the economy” supported by population growth, lifting commodity prices, booming tourism sector, pending expansionary fiscal policy and solid performances in sectors such as IT and horticulture.