Back
27 Feb 2015
New Zealand: Business confidence progressing nicely
FXStreet (Bali) - Cameron Bagrie, Chief Economist at ANZ, notes that business confidence in New Zealand is progressing nicely, adding that the economy is into the fifth year of an economic expansion with depth down the order.
Key Points
"Business confidence is buoyant. A net 34% of firms are optimistic about the general economy. Sentiment across the agriculture sector is now positive. Services and construction are the pace-setters."
"Businesses remain very optimistic (+41, previously +37) about prospects for their own business – that’s what firms know best and it’s the real litmus test, with a strong correlation to GDP growth."
"Profit expectations firmed to +28 from +21. More money in the till is positive for expanding employment and investment."
"Given this – plus plunging interest rate expectations – it’s not surprising that a net 23% of businesses expect to be hiring more staff over the year ahead and a net 22% expect to be investing more. Both are up on closing reads for 2014."
"Sentiment in the residential construction sector was strong (+48) and likewise for commercial construction (+26), though both were down a tad."
"Export intentions eased to +24; that’s the googly in the form of the high NZD at work."
"Pricing intentions lifted a tad (from +20 to +23) but the level is still tame."
"One-year-ahead inflation expectations fell to 1.7%. That equals the record low recorded in May 1999, with readings for all subsectors below the RBNZ’s 2% target midpoint"
Key Points
"Business confidence is buoyant. A net 34% of firms are optimistic about the general economy. Sentiment across the agriculture sector is now positive. Services and construction are the pace-setters."
"Businesses remain very optimistic (+41, previously +37) about prospects for their own business – that’s what firms know best and it’s the real litmus test, with a strong correlation to GDP growth."
"Profit expectations firmed to +28 from +21. More money in the till is positive for expanding employment and investment."
"Given this – plus plunging interest rate expectations – it’s not surprising that a net 23% of businesses expect to be hiring more staff over the year ahead and a net 22% expect to be investing more. Both are up on closing reads for 2014."
"Sentiment in the residential construction sector was strong (+48) and likewise for commercial construction (+26), though both were down a tad."
"Export intentions eased to +24; that’s the googly in the form of the high NZD at work."
"Pricing intentions lifted a tad (from +20 to +23) but the level is still tame."
"One-year-ahead inflation expectations fell to 1.7%. That equals the record low recorded in May 1999, with readings for all subsectors below the RBNZ’s 2% target midpoint"