Business confidence on the mend

  • 30/09/2015
Business confidence on the mend

New Zealand businesses have become less gloomy about the economy's prospects, after five months of declining confidence.

A net 19 percent of firms are pessimistic about the general outlook for the economy over the coming year, an improvement on the net 29 percent of pessimists in August, according to the latest ANZ Business Outlook survey.

A net 17 percent of firms see their own activity expanding in the coming year, up from a net 12 percent, led by construction and manufacturing.

"After five successive months of declines in the headline figure - and substantial declines at that - the turnaround is welcome," ANZ Bank New Zealand economist Philip Borkin said in a note.

The business confidence survey comes after an ANZ-Roy Morgan consumer confidence report showed an improved sentiment among New Zealanders, ending a downward spiral caused by an increasingly gloomy rural sector, the Canterbury rebuild peaking and threatening global slowdown.

Of the 468 respondents, a net 7.2 percent expect to increase investment over the coming year, an improvement on the 0.4 percent saying they would scale back investment, and a net 3.2 percent anticipate taking on more staff over the next 12 months, largely unchanged from 2.8 percent in August.

"Hiring and investment intentions are soft, but more consistent with maintaining the status quo than shedding staff or cutting back on spending aggressively," Mr Borkin said.

Profit expectations improved, with a net 5.5 percent expecting increased returns in the coming year, compared to a net 1.5 percent picking smaller earnings.