Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


NZ business confidence rockets to 20-year high

NZ business confidence rockets to 20-year high, lifting jobs, profits, investment

Jan. 14 (BusinessDesk) – New Zealand business confidence climbed to a 20-year high in the fourth quarter, lifting expectations for profits, hiring and investments, and raising the prospects for inflation to start to accelerate.

A net 52 percent of businesses were optimistic in the December quarter, seasonally adjusted, the highest since June 1994 and up from 33 percent three months earlier, which was itself the highest in more than three years, according to the New Zealand Institute of Economic Research’s Quarterly Survey of Business Opinion.

Domestic trading activity, which is closely aligned with economic growth, climbed to the strongest since March 2005, with a seasonally adjusted net 15 percent of firms experiencing a pickup in their own activity. Expectations for the coming quarter rose to 32 percent from 24 percent.

“This quarter every region in our survey was doing better,” said Shamubeel Eaqub, principal economist at NZIER. “Until recently much of the recovery was concentrated in Canterbury. This has now broadened to most regions across New Zealand, which points towards a more sustainable and stable recovery.”

The survey comes as economists bet the central bank will raise interest rates in the first quarter, lifting the official cash rate from a record low 2.5 percent to cool inflation pressures in what some economists have called a ‘rock star economy’.

Those that lifted hiring in the latest quarter rose to a net 7 percent from 1 percent, while for the coming quarter hiring intentions slipped to 12 percent from 17 percent. Those reporting ease in finding labour deteriorated to -30 percent from -29 percent for skilled workers and worsened to -10 percent from -5 percent for unskilled workers. Much of the pressure is in Canterbury.

The long-run average is -16 percent for skilled labour and a net 15 percent for unskilled.

The survey was taken before Dec. 15, meaning it hasn’t captured the pickup in retail activity over the peak Christmas-New Year period, though merchants still reported the strongest retail sales since September 2002, with those reporting higher sales jumping to 20 percent from 2 percent while orders placed over seas rose to 18 percent from 5 percent.

Price pressure remained relatively subdued, Eaqub said. Those reporting a rise in average costs slipped to a net 21 percent from 22 percent and expectations for the coming quarter fell to 18 percent from 26 percent. At the same time, those reporting a rise in selling prices rose to 10 percent from 8 percent and for the coming quarter held steady at 24 percent.

“Firms intend to raise prices in coming quarters due to increasing capacity pressures and strengthening economic growth,” Eaqub said. “Capacity constraints are most pronounced in Canterbury, but are starting to emerge in other regions too.”

Capacity utilisation slipped to 90.2 percent from 91 percent three months earlier, while those seeing capacity constraint climbed to 12.7 percent from 10.8 percent.

Those seeing profit growth turned positive, just in the latest quarter, at a net 1 percent from -8 percent in the third quarter. For the coming quarter, a net 16 percent saw profit growth from 12 percent three months earlier.

Investment intentions for buildings rose to a net 7 percent from 3 percent and on plant and machinery those planning to invest more jumped to 18 percent from 8 percent.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

BusinessDesk: APN's NZME Sees Future In Paywalls, Growth In Digital Sales

APN News & Media has touted a single newsroom concept for its NZME unit in New Zealand, similar to what Germany's Die Welt uses, saying an 'integrated sales proposition' is helping it win market share, including ... More>>

Labour Party: Global Milk Prices Now Lowest In 6 Years

The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices ... More>>

BusinessDesk: NZ Inflation Expectations Creep Higher In June Survey

May 19 (BusinessDesk) - New Zealand businesses lifted their expectations for inflation over the next two years, sapping any immediate pressure on the Reserve Bank to cut interest rates, and prompting the kiwi dollar to jump higher. More>>

BusinessDesk: Lower Fuel Costs Drive Down NZ Producer Input, Output Prices

May 19 - Producer input and output prices fell in the first quarter, mainly reflecting lower fuel costs and weakness in prices of meat and dairy products. More>>

Media: Fairfax Media NZ Announces Senior Editorial Team

Fairfax Media New Zealand has today confirmed its new editorial leadership team, as part of a transformation of its newsrooms aimed at enhancing local and national journalism across digital and print. More>>

Science: Flavonoids Reduce Cold And Cough Risk

Flavonoids reduce cold and cough risk Research from the University of Auckland shows eating flavonoids – found in green tea, apples, blueberries, cocoa, red wine and onions – can significantly reduce the risk of catching colds and coughs. The research, ... More>>


BusinessDesk: RBNZ House Alert Speech The Catalyst For Government Action

Prime Minister John Key all but conceded that pressure from the Reserve Bank of New Zealand for concerted action on rampant Auckland house prices was one of the main catalysts for the government's weekend announcements about tightly ... More>>

BusinessDesk: How To Fall Foul Of The New Housing Tax Rules: Tips From IRD

Just because you rented out your investment property doesn't absolve you from paying tax, says the Inland Revenue Department in a summary of commonly made mistakes by non-professional property investors when it comes to their tax liability.More>>

Legal: Superdiversity Law, Policy And Business Stocktake Announced

Mai Chen, Managing Partner at Chen Palmer New Zealand Public and Employment Law Specialists and Adjunct Professor of Law at the University of Auckland, today announced the establishment ... More>>

Housing: More House Price Gains Expected

House price expectations remain high, with a net 56% of respondents expecting house prices will increase. Fears of higher interest rates are fading, consistent with the RBNZ’s signals this year. Affordability and a lack of houses for ... More>>

TDDA: State-Of-The-Art Drug Testing Laboratory To Open In Auckland

World leading drug testing agencies, The Drug Detection Agency (TDDA) and Omega Laboratories, open New Zealand laboratory More>>

Network: Bigpipe Launches Ultra-Fast Broadband Into Wellington

Bigpipe Launches Ultra-Fast Broadband into Wellington Naked broadband provider Bigpipe has extended its national reach, announcing today, the launch of its unlimited UFB offering into Wellington. The Spark Venture business is giving Wellingtonians the ... More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news