Sentiment soars in latest BNZ confidence survey

Monday 11th May 2009

Confidence has soared in the latest survey of 18,000 readers of the BNZ Weekly Overview, as global optimism rebounded, equity markets rallied and economic data in the U.S. and Australasia was better than expected.

A net 27% of respondents to the BNZ Confidence Survey expect the economy to improve over the next 12 months, up from a net 0% last month. The improved sentiment matched the previous record high of the series last September, just before the collapse of Lehman Brothers Inc. The BNZ series typically has a close correlation with the more closely-watched National Bank Business Outlook survey.

“Over the past two months world markets have backed away from the Great Depression scenario in the face of a multitude of better than expected data releases offshore,” chief economist Tony Alexander said. “Unless world economic data turn down again, there will be continuing upward pressure on fixed borrowing costs.”

Among figures in the past week, New Zealand’s jobless rate rose to a lower-than-expected 5%, according to the Household Labour Force Survey, while Australian unemployment defied expectations, falling to 5.3% from 5.7%. The NZX 50 index has gained 9.2% since the start of April.

The New Zealand dollar held at a five-month high 60.90 US cents, up from 59.39 cents in New York on Friday.

Global optimism has lifted investor appetite for high-yielding, or riskier, assets and helped stocks rally. The Standard & Poor’s 500 has gained 16% since the start of April. The U.S. shed a less-than-expected 539,000 jobs last month, according to data from its Labor Department, while the unemployment rose to a 26-year-high of 8.9%.

Businesswire.co.nz

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