New Zealand: Business confidence slips from September's 14-year high
October 31, 2013
Confidence among businesses fell slightly in October according to the ANZ Bank Business Outlook, which reported that a net 53.2% of businesses surveyed expect economic conditions to improve in the coming 12 months. The result came in below September's 54.1%, which marked the highest level since March 1999. Despite the drop, business confidence remains well above the 0-point threshold that separates optimism from pessimism.
The monthly decline reflects less positive business sentiment in the construction sector and in retail. Conversely, the October survey showed that firms' expectations for their own activity, which is a better predictor of economic activity, had improved over the previous month. Despite the slight drop in confidence, ANZ bank noted that, "the October results are enormously encouraging, given that there are still some real headwinds."
High levels of business confidence bode well for investment going forward. FocusEconomics Consensus Forecasts panelists expect fixed investment to grow 7.3% in 2013, which is down 0.1 percentage points from last month's estimate. For 2014, the panel sees fixed investment accelerating to 9.3%.
Author: Ricardo Aceves, Senior Economist