- Cameron Bagrie, ANZ New Zealand chief economist
New Zealand business confidence surged to the highest level in six months in November, suggesting economic activity and hiring may soon start to gather steam. A net 14.5% of firms were confident that business conditions would improve over the next 12 months, compared with a net 10.5% that voiced optimism in October, according to the ANZ Business Outlook survey. Companies were also upbeat about their own outlook, with a net 32% of firms expecting their own activity to expand in the coming year, up from a net 23.7% in October. The service sector appeared to be the most optimistic, with the confidence in the outlook for the economy strengthening to a net 26.7% from 18.3% last month. At the same time agriculture was the most pessimistic, with a net 12.5% of businesses voicing downbeat mood.
While the New Zealand economy has been struggling due to slower housing market in Auckland and Christchurch, a surplus of labour and low dairy product prices, it is being supported by record tourism and migration, housing market strength outside of Auckland as well as lower New Zealand Dollar. The Reserve Bank of New Zealand has slashed interest rates three times since June in an effort to support the economy and inflationary pressure. Yet, economists see further stimulus as imminent.
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