Business confidence surges
Firms' confidence in their own outlook, as well as the rest of ht economy, has soared.
Firms’ confidence in their own outlook, as well as the rest of ht economy, has soared.
The monthly National Bank business confidence survey saw a 24% rise on last month’s figure and firm’s expectations of their own outlook for the year are a net 40% positive.
That is consistent with 5% annual growth in GDP.
Detailed points on the outlook ahead are also all in the positive territory. Profit expectations rose from+8 to +23, employment intentions rose from +6 to +13, and investment intentions lifted from +6 to +15.
All are above their long-term average, says National Bank chief economist Cameron Bagrie.
The main negative is an inflationary outlook, up from 2.04% to 3.3%, above the Reserve Bank’s ceiling of 3%.
The Reserve Bank is to review the official cash rate again next Thursday and although there are no expectations of a rate rise above the currently level of 2.5%, the latest in a run of better-than-expected economic good news, along with clear signs of inflationary pressures emerging, could see a signal for an earlier rate rise than the central bank’s earlier stance.
The current market pricing is for no rate rises until early in 2012.
Rob Hosking
Tue, 31 May 2011
Tue, 31 May 2011
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Business confidence surges
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