NZ business confidence eases in December, still buoyant
New Zealand business confidence slipped in December, while staying largely upbeat, as inflation remains tame in spite of a growing economy and exporters see improving times ahead.
A net 30.4 percent of firms are optimistic about their general prospects in the coming year, down from 31.5 percent in November, according to the ANZ Business Outlook survey. Firms expecting an improvement in their own activity fell to 37.3 percent from 41.7 percent a month earlier.
"While the growth rate of the New Zealand economy is likely to slow over the next year, that is natural in a maturing economic cycle," ANZ economist Sharon Zollner said in her report. "This is economy is well beyond 'recovery'."
Business confidence hit a 20-year high in February as the economic momentum fuelled by high dairy prices and increased construction stoked activity, though that abated as global milk prices fell and into the lead-up to the September general election. Since the re-election of the National-led administration, firms have recovered some of their lost swagger in what is still an economy growing faster than most of its peers.
Today's survey showed exporting firms were more upbeat about global markets, with a net 27.7 percent expecting to lift their export intentions from 21.1 percent in November.
ANZ's Zollner said the global risks to New Zealand's economy are of the most concern, with Europe still struggling, China slowing, Japan stagnant and Australia yet to find a response to the peak of its resources boom.
Domestic risks to growth come from dairy prices, which the bank's economists see as unlikely to rebound quickly, the country's buoyant property market, and whether inflation will emerge.
Among surveyed firms, a net 20.2 percent expect to lift investment in the coming year, up from 19.2 percent in November, while a net 19.9 percent anticipate hiring new staff, edging down from 20.1 percent.
Pricing intentions were largely unchanged at a net 20 percent, and firms expect inflation to rise 2.1 percent in the coming year.