Confidence: well, we've got plenty of it, if the latest couple of surveys are anything to go by.
The National Bank of New Zealand's survey shows that business confidence is up to +25 from +15 last month (in seasonally adjusted terms). Confidence appeared strongest in the service sector.
The National Bank's survey comes hard on the heels of WestpacTrust-McDermott Miller's roundup of consumer confidence, which is apparently at its highest level since early 2000. The confidence index for the March quarter was 121.6 (optimists equal pessimists when the index is 100), and was billed as a clear trend back to a favourable consumer environment.
WestpacTrust Chief Economist Adrian Orr pointed out the divergence in sentiment between New Zealand and other countries, particularly the US and Australia, but said the impact of the global slowdown was some months away. He said that the decline in inflation expectations shown in the bank's survey would give the Reserve Bank confidence to continue to ease policy.
Meanwhile, Deutsche Bank's Senior Economist Darren Gibbs says it would be surprising if the global slowdown did not moderate domestic confidence levels to some degree over the coming months.
"However, we remain of the view that the New Zealand economy is well placed to grow at or around potential growth levels (which we assess as being no higher than 2.5 per cent per annum). Thus, we anticipate only one further easing by the RBNZ in the current cycle - a 25 basis points cut in May."
