(RTTNews) - New Zealand's business sentiment improved in the fourth quarter, the latest Quarterly Survey of Business Opinion conducted by the New Zealand Institute of Economic Research showed Tuesday.
The economy rebounded from a weak September quarter, but the recovery remains shallow and slow. A return to growth brightened business mood, the survey revealed. Business confidence rose to a seasonally adjusted plus 3% from minus 8%.
"This confidence is slowly filtering through to new hiring and investment, but this needs to accelerate to drive a sustainable recovery," said Shamubeel Eaqub, Principal Economist at NZIER. "Continued deleveraging by households, restrained government spending and a soft housing market will influence the medium term outlook."
Business confidence improved moderately in the fourth quarter, reflecting the expected boost to activity from earthquake rebuilding activity and the looming rugby World Cup, said J.P. Morgan economist Ben Jarman.
A net 8% of firms now expect economic conditions to improve in the coming six months, compared with a net 6% in the third quarter. The survey showed that firms' trading activity climbed to minus 1% from minus 15% on a seasonally adjusted basis.
Although the economy avoided a double-dip recession, the rebound was patchy, concentrated in large firms and in the upper North Island, the report said. Activity fell sharply in Canterbury, reflecting post-earthquake economic disruption.
Seasonally adjusted trading activity slumped in Canterbury to minus 33% from minus 6%. All sectors reported weaker activity in December, but merchants showed the largest slump. The region is gearing up for reconstruction activity. As a result, construction employment surged in Canterbury.
The fundamentals for the New Zealand housing market undoubtedly are soft, as households continue to shy away from debt, Jarman at J.P. Morgan noted. "We would expect more short-term strength in the non-residential sector in the near-term, to be followed by a short-lived pop in residential building activity later on."
by RTT Staff Writer
NZD/USD had a nice surge yesterday but prices have retreated to the entry prices during the night.Just above the 100DMA @ 0.7532 on the Daily as prices bounce around on the 4hrs @ 0.75831 at the time of writing if prices hold the we could see prices testing the highs @ 0.7800 where short stops have been placed therefore creating a bust break out.possable 3rd wave up with riseing trend line.
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