N.Z. Business Confidence Rises to 10-Month High
New Zealand business confidence rose to a 10-month high in July as companies became less pessimistic about profits and the ease of getting credit.
A net 12.6 percent of companies surveyed this month expect sales and profits will increase over the next 12 months compared with 8.3 percent in June, according to a report released by ANZ National Bank Ltd. in Wellington today. The net figure subtracts the number of pessimists from the number of optimists.
Improving business confidence adds to signs the economy may emerge from the worst recession in three decades later this year, buoyed by record-low interest rates and a recovery in global demand. Reserve Bank Governor Alan Bollard will probably keep the benchmark interest rate unchanged at 2.5 percent tomorrow, according to all 10 economists surveyed by Bloomberg.
“The outlook is improving and so it should after six quarters of contraction,” said Cameron Bagrie, chief economist at ANZ National Bank direct payday loan lenders. “Improved confidence is an important step toward recovery and we appear to be making that first step.”
New Zealand’s dollar bought 65.83 U.S. cents at 3:18 p.m. in Wellington trading from 65.80 cents immediately before the report was released.
A net 18.7 percent of the 412 companies surveyed say the broader economy will improve compared with 5.5 percent in the June survey.
Companies are less pessimistic about profits and the ease of getting credit. Fourteen percent expect profits to fall over the next year compared with 24 percent in June.
The proportion of firms planning to fire workers fell to 6.8 percent from 17 percent.