NZ business confidence up, but world ranking down

By NZPA

Tuesday 23rd January 2007

New Zealand's business confidence has improved in the last year, but it has still been overtaken by many other countries, according to an international survey released today.

New Zealand slipped to 22nd, from 19th last year, on the Grant Thornton International Business Report's ranking of global optimism.

However, New Zealand businesses improved their outlook with a net 42% optimistic against a net 23% optimism previously.

"The problem was that, generally, optimism levels lifted significantly and it was overtaken by nations such as Russia, the United Kingdom, Luxembourg and Spain," said Grant Thornton New Zealand spokesman, Peter Sherwin.

"Last year New Zealand's results reflected a downhill run in both business and consumer confidence at that time.

"This time around, the survey is pretty much in line with the gains in particular in business confidence, as the worries of a pending economic slump have effectively dissipated over the intervening period," Sherwin said.

The global average rose to a net 45% from net 39%.

The improved outlook for much of the rest of the world was positive for New Zealand's exporters, he said.

New Zealand businesses were less optimistic than the previous year about turnover and selling prices. They had higher expectations on exports, employment, profitability, and investment in new buildings, plant and machinery.

The highest optimism levels shown by New Zealand in the Grant Thornton survey occurred in 2005 (64%) and 2004 (49%).

Australia's reading slipped slightly to a net 61% from net 64% the previous year, pushing it to 13th position from seventh.

Asian business owners continued to be the most confident in the world, with India, the Philippines, China and Singapore taking the top four positions in the survey.

India topped the table for the second year in a row, recording a net 97% optimism, up from 93%.

Overall, the survey showed businesses in 29 out of 32 countries were optimistic about their economy's performance in 2007, with 24 being more optimistic than last year.

"For the first time in five years, the findings of our survey don't appear to be influenced by extraordinary global events such as terrorism, natural disasters or potential health scares," Sherwin said.

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