New Zealand: Business confidence improves notably in September
September 12, 2020
The ANZ bank business outlook indicator improved considerably in September, according to a preliminary reading. As a consequence, a net 26.0% of firms reported that they expect general business conditions to worsen in the year ahead, up from a net 41.8% in August. However, the headline reading remained deeply entrenched below the net-0% threshold that separates pessimism from optimism among businesses.
September’s result reflected an improvement in sentiment across most components. Export, employment and investment intentions as well as profit expectations were less pessimistic than in August. Moreover, capacity utilization improved from the prior month.
Meanwhile, firms’ outlooks regarding their own activity—a metric which has a stronger correlation to GDP growth—climbed to a net minus 9.9% in September, from August’s net minus 17.5%.
Commenting on the release, Sharon Zollner, ANZ chief economist, stated:
“The New Zealand economy has a long way to go to navigate this crisis. Fiscal and monetary policy are certainly working their magic. But come year end, far fewer firms will be supported by wage subsidies, and the loss of tourists will be more sorely felt. But for now, things appear to be firmly in the “could be worse” basket”.