Article – BusinessDesk
Feb. 28 (BusinessDesk) New Zealand business confidence rose to a 19-month high this month, with gains in all five sectors tracked as companies become more bullish about investment, profits and hiring.
NZ business confidence climbs to 19-month high, with exports the laggard
Feb. 28 (BusinessDesk) – New Zealand business confidence rose to a 19-month high this month, with gains in all five sectors tracked as companies become more bullish about investment, profits and hiring.
A net 39.4 percent of firms polled in the ANZ Business Outlook expect general business conditions to improve in the year ahead, up from 23 percent a month earlier. A net 38 percent of firms are more optimistic about their own prospects, up from 31 percent.
The monthly survey follows other signs that the economy is picking up. The benchmark NZX 50 Index of leading companies is at a five-year high, retail sales are growing and consumer confidence is at a 32-month high.
Export intentions were the outlier, according to ANZ chief economist Cameron Bagrie. A net 13 percent of firms expect to increase exports in the next 12 months, below the long-term average of 32 percent.
“The main culprit is obvious – a New Zealand dollar that continues to be out of line with local fundamentals,” Bagrie said.
Profitability expectations rose to 14 percent from 8.8 percent, while a net 16 percent aimed to increase investment, up from 14 percent. Hiring intentions rose to 11 percent from 8 percent.
Inflation expectations nudged up to 2.31 percent from 2.23 percent, while ease of credit retreated to 8.5 percent from 15 percent. A net 18 percent planned to raise3 prices over the next 12 months, from 15 percent in the previous month’s survey.
By sector, construction firms were the most bullish on the general economy, at 50 percent, though on their own activity in the next 12 months the reading slipped to 35.7 percent. Agriculture was the least confident, with a net 6.5 percent seeing a general improvement in business conditions and a net 23 percent seeing a pickup in their own business.