- Cameron Bagrie, ANZ chief economist
New Zealand business confidence declined in February amid falling export prices and turbulence in equity markets. The ANZ Bank survey showed that a net 7.1% of respondents were optimistic about the economy over the year ahead, compared with 23% in the January survey. A net 25.5% of companies saw their own activity increasing, down from 34.4% in the prior month, and a net 12% expected their profits growing, compared to a net 17.7% in January. Business confidence declined in all industries except manufacturing, with attitudes the most downbeat in agriculture. Moreover, interest rates are predicted to decline by a net 37.3% of respondents, from net 32.8% in January. Inflation expectations for the coming year slipped to 1.39%, from 1.64%. A net 6.9% of firms see the unemployment rate rising, compared to a net 19% in January, and net 21.9% see capacity utilisation increasing, compared to 17.7% a month earlier.
A separate report showed New Zealand building consents dropped at the quickest pace since August last month. However, building activity is expected to continue to be supported by record-low interest rates and strong housing demand. Building consents plunged a seasonally-adjusted 8.2% month-on-month in January, according to Statistics New Zealand, following an increase of 2.3% in December.
© Dukascopy Bank SA