Confidence up as spring looms, construction bounces back
BUSINESSDESK: New Zealand business confidence rose in August as construction investment intentions bounced back and firms began feeling a seasonal uplift as spring looms.
A net 20% of respondents in National Bank's Business Outlook expect business conditions to improve over the next 12 months, up from a net 15% in July.
Companies' own activity expectations improved, with a net 26% expecting more activity in their business in the year ahead, up from 24%.
"A movement of 5 percentage points is so-so in terms of the signal, but nonetheless we'll take it as a step in the right direction," chief economist Cameron Bagrie says. Still, "stripping out the mild seasonal factor we appear to be flat-lining".
Export intentions also gained, with a net 16.9% expecting to ship greater volumes over the next 12 months, up from 9.1% last month.
Investment intentions pulled back with a net 11% expecting to invest more, down from 13%. Employment intentions also eased, with a net 6% plan to take on workers, down from a net 11% in July.
The strongest growth came from construction. A net 47% of firms expect to spend more on residential construction, up from a net 28%, and a net 21.9% may invest more in commercial construction, up from a net 4.3%.
"This offers some hope that the construction sector can help fill the void across the economy in late 2012 and early 2013," Mr Bagrie says.
Profit expectations rose to 5% from 1%, which the bank noted was "still marginal". It described pricing intentions as "tame", with a net 16% expecting to raise prices in the year ahead, down from 17.3% last month.
Inflation expectations eased to 2.34% from 2.55%.