NZ: Business confidence continues to lift - ANZ

Cameron Bagrie, Chief Economist at ANZ, suggests that it’s no longer a bob each way as NZ’s business confidence continues to lift.

Key Quotes

“A net 28% of businesses are optimistic about the year ahead, up 12 points on the month prior. Service sector firms remain the front-runner. Agriculture has stormed through the field, moving from last to second place.

Firms are accelerating out of the turn. A net 42% of businesses expect better times for their own business, the highest reading since July 2014. There is ample competition across manufacturing, construction and services to be first past the post. Confidence improved across all five sub-sectors. In seasonally adjusted terms, own activity expectations rose to a net 47%.

Across other elements of the survey we note:

• Investment intentions eased from +22 to +20. That’s still well above the historical average of +13.
• Employment intentions are strong. A net 25% of businesses are expecting to hire.
• Profit expectations are in the money. A net 34% of businesses expect a lift in profitability, which is up 12 points.
• Export intentions lifted strongly from +20 to +31. No NZD handicap apparent.
• Residential and commercial building intentions recorded a quinella lift.
• Firms’ pricing intentions nudged up from +15 to +17 – still low. Inflation expectations were unchanged at 1.4%.”