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

 


NZ business confidence at highest level in almost 20 years

NZ business confidence rises to highest level in almost 20 years; New Zealand dollar jumps

By Tina Morrison

Feb. 28 (BusinessDesk) – New Zealand business confidence rose to its highest level in almost 20 years in February, indicating strong economic growth this year.

A net 70.8 percent of firms are optimistic about general business conditions this month, up from 64.1 percent in December and the highest level since March 1994, according to the ANZ Business Outlook survey. The New Zealand dollar jumped as high as 83.95 US cents from 83.61 cents immediately before the 1pm release, and was recently trading at 83.93 cents.

Firms seeing a pickup in their own business activity rose to 58.5 percent from 53.5 percent in December, the highest reading since June 1994. Expected profitability of 44.6 percent is up from 39.7 percent in December and at the highest level since April 1994.

A net 32.4 percent expect to hire more staff, up from 24.7 percent in December and the highest level December 1992, while investment intentions at 35.2 percent is up from a previous reading of 21.8 percent and the strongest since March 1994.

The strong survey results are despite headwinds from an elevated currency and the expectations from a net 90 percent of respondents that interest rates will rise over the coming year. While the ANZ’s composite indicator of business and consumer confidence is signalling the potential for 6 percent annual growth by mid-2014, capacity constraints and a weak national balance sheet rule out that growth trajectory, and suggest growth of about two thirds that pace, at 4 percent, is more likely, ANZ said.

“That’ll be good enough to propel New Zealand to the Top of the Pops – topping the OECD growth stakes – so-called ‘Rock Star’ status,” ANZ Bank New Zealand chief economist Cameron Bagrie said. “But we need many more years of solid gold economic growth – underpinned by ongoing productivity improvements – to secure our place in the rock and roll Hall of Fame. We’re simply up at a time a host of others are in rehab.”

Interest rates are set to move higher, given the survey results show a net 32.9 percent of firms expect to raise prices, a higher trend for inflation expectations of 2.6 percent and with pricing intentions in the construction sector at the highest since 1992, ANZ said.

While not hitting such highs, other measures in the survey are robust, ANZ said, citing investment in livestock, residential and commercial investment intentions and export intentions.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Consents And Taxes: Trustpower 'very Disappointed' With Judgement

Trustpower is "very disappointed" with a Supreme Court ruling dismissing its bid to claim tax deductions on $17.7 million of project costs in a case closely watched by large-scale infrastructure developers. More>>

ALSO:

Fruitful Endeavours: Kiwifruit Exports Reach Record Levels

In June 2016, kiwifruit exports rose $105 million (47 percent) from June 2015 to reach $331 million, Statistics New Zealand said today. Overall, goods exports rose $109 million (2.6 percent) in June 2016 (to $4.3 billion). More>>

ALSO:

Economic Update: RBNZ Says Rate Cut Seems Likely

The Reserve Bank will likely cut interest rates further as a persistently strong kiwi dollar makes it difficult for the bank to meet its inflation target, it said. The local currency fell. More>>

ALSO:

House Price Action Plan: RBNZ Signals National Lending Restrictions

The central bank wants to cap bank lending to property investors with a deposit of less than 40 percent at 5 percent and restore the 10 percent limit for owner-occupiers wanting to take out a mortgage with a deposit of less than 20 percent, according to a consultation paper released today. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news