New Zealand growth outlook brightens

Gloom and doom are passing away from New Zealand economy, despite expectations of further slowdown in China, one of its major trading partner. Weaker Kiwi, this year, which is down more than 16% in last 12 months, against Dollar have started feeding into optimism, coupled with further easing expectations from Reserve Bank of New Zealand (RBNZ).

According to ANZ survey released today,

• Business optimism rises to six month high, as net 15% businesses are optimistic about general economy in future. ANZ's composite indicator is implying 3% growth next year. Current growth rate is 2.4%.
   
• Details show, activity expectations rose 8 points in November to 32. Sentiment is strongest in service sector and weakest in agricultural sector. Investment intentions rose by 3 points, while employment intentions and profit expectations, rose 2 points each. Export intentions improved to 23, while commercial construction intentions rose 17 points to 38.
   
• Weakness was noticed in residential investment intentions, which dropped from 23 from 39.

Though positive mood is encouraging, overall agricultural sector remains weak, in spite of improvement. Without recovery in New Zealand's key commodities export, overall weakness may persist in the medium term.

New Zealand Dollar is showing some strength, as it finds support around 0.65 against Dollar. Broader outlook, however, is still not bullish.