New Zealand business sentiment continues to stay high in Q4

New Zealand business confidence continues to stay high. The NZIER business sentiment index registered a further rise in the fourth quarter. In the December quarter, 28 percent of firms anticipate a rebound in economic conditions in the coming six months, as compared with the 26 percent recorded previously.

The New Zealand economic outlook is strong with business sentiment remaining high. There was a slight weakening in experienced demand and additional expectations of own activity for the next quarter. This is in line with the anticipation that the economic growth would decelerate from 4 percent to 3 percent in 2017, noted ANZ in a research report.

This partially shows that capacity constraints continue to be acute, with the CUBO recovering to 92.7 percent. Capacity utilization on the part of builders recovered, while there was a bit of easing for manufacturers and exporters.

Business sentiment continues to remain high throughout all sectors, underlining the widespread nature of the growth. Regional sentiment continues to be high, particularly outside the upper North Island where confidence eased a bit. This emphasizes the step-up of activity outside of the Auckland halo, driven by internal migration, construction/infrastructure demand, tourism, improvement in dairy sector and job opportunities.

Business confidence in Wellington was high, implying just a fleeting effect from the November earthquake on the wider business community. Meanwhile, own expected and experienced trading activity slowed slightly in December. This easing greatly reversed the earlier quarter’s gains. Manufacturers experienced output rose in December with strong exports leading the way. This is in line with a global cyclical upswing for manufacturers, trade and commodities.

At 08:00 GMT the FxWirePro's Hourly Strength Index of New Zealand Dollar was highly bullish at 168.118, while the FxWirePro's Hourly Strength Index of US Dollar was bearish at -93.5477. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex