The latest ANZ Bank business confidence survey contains continuing positive news for the year ahead – a further boost for auto and transport businesses.
“2013 continues to unfold in an assured manner – with confidence across the business sector remaining high,” reports the bank’s senior economist, Cameron Bagrie.
“A net 42% of businesses expect general business conditions to get better over the year ahead – up 10 points on the month prior. Readings are now elevated across all the major sub-sectors.
“Firms remain upbeat about prospects for their own business. A net 34% of firms expect better times over the year ahead for themselves. Headline confidence figures can wax and wane: it is what firms think about their own business prospects that matters most,” says Bagrie.
“Similar nuances to prior months are apparent across the remainder of the survey. Profit expectations have risen to a 22-month high. A net 10 percent of firms expect to lift employment. That’s solid, though not stellar. Investment intentions remain elevated. Conversely, export intentions remain weak.
“Pricing measures remain benign. Inflation expectations eased down to 2.2%. There’s been a notable drift lower within the construction sector, easing to a 3.5-year low: that’s an encouraging sign.
“The last thing New Zealand needs is for the RBNZ’s hand to be forced on the interest rate tiller courtesy of construction costs. Pricing intentions remained stable with a net 20% expecting to raise prices: that’s tame.
“Our combined composite growth indicator – combining indicators from both the Business Outlook survey and Consumer Confidence (a survey the ANZ also produces) – is flagging 3.7% growth by the end of the year.
“Once again we’re left with an impression of an economy that is neither too hot nor too cold. We’re in the groove. This in itself is tremendously encouraging. Businesses respond to stability and certainty.
“NZ has historically been a 3-speed economy – fifth, neutral and reverse. We may have found third or fourth gear. At present there seems enough growth to grease the economy’s wheels, without the threat of the wheels coming off,” says the senior economist.
