Election jitters in New Zealand boardrooms and a hard-hitting Australian budget have closed the business confidence gap between the two countries over the last three months, according to consultancy Grant Thornton’s International Business Report (IBR).
The report, which surveyed businesses in 34 economies, suggests New Zealand business confidence for the next 12 months has dropped 18 percent, from 88 percent to 70 percent in first quarter. Australia confidence has rebounded from 36 to 50 percent. Confidence levels in New Zealand have exceeded Australia since 2011.
Thornton NZ partner Mark Hucklesby, says directors are talking about the elections and offshore customers are seeking views on the election’s likely outcome.“Offshore customers want stability and even though the National Party has a strong majority, the quirks of MMP leave overseas business leaders with a sense of unease which in turn dents confidence among New Zealand business.”
The survey was conducted before the Reserve Bank’s latest interest rate rise which probably further eroded confidence levels given its impact on exchange rates.But despite the confidence drop, New Zealand is still ranked sixth in the world, one place lower than last quarter. India (86%), Ireland (84%), United Kingdom (80%), Germany (79%) and the United States (74%) are ahead of us.
Read more: www.internationalbusinessreport.com