New Zealand: Business confidence decreases slightly in March, remains high
March 31, 2014
Confidence among businesses just barely decreased in March according to the ANZ Bank Business Outlook, which reported that a net 67.3% of businesses surveyed expect better economic conditions in the coming 12 months. The result came in below February's 70.8%, which marked a 20-year high. Business confidence still sits well above the 0% threshold that separates optimism from pessimism.
According to ANZ, slightly lower levels of business confidence were recorded for 12 of the 15 categories that compose the business confidence indicator. However, ANZ pointed out that business confidence among all major economic sectors was above 50 points, which indicates expectations of a broad-based expansion. Compared to the previous month, firms' expectations for their own activity, which is a better predictor of economic activity, decreased only 0.51% to a value of 58.2. Furthermore, ANZ stated that, “no survey indicator points to an imminent turning point in the economy.”
High levels of business confidence signalize good prospects for investment going forward. FocusEconomics Consensus Forecasts panelists expect fixed investment to grow 9.2% in 2014, which is down 0.1 percentage points from last month's estimate. For 2015, the panel sees fixed investment slowing to 6.4%.
Author: Armando Ciccarelli, Head of Data Solutions