WINE, CHEESE & CIGARS
A big thank you to our supporters, suppliers, sponsors and our host No Idea Bar for helping make our Wine, Cheese & Cigars night such a success. We not only had our NZ Ambassador and Second Secretary join the fun, we also had members of the Mexican, South African, Australian and Swiss Chambers joins us for this Business Connect event. Wines from NZ, Australia and USA, specialty cheeses from Switzerland and New Zealand, and cigars from Cuba, Nicaragua, etc., all added to a successful event!
NZ BUSINESS CONFIDENCE RISES IN MAY
New Zealand business confidence rose in May and firms saw rising exports, employment, profits, prices and inflation, suggesting the domestic economy continues to enjoy reasonable growth.
A net 15 percent of companies surveyed in the ANZ Business Outlook expect general business conditions to improve over the coming year, up from 11 percent in April. A net 38.3 percent see better times ahead for their own business, edging up from 37.7 percent, but still above the long-run average of 28 percent, and profit expectations rose 1.9 points with a net 27.7 percent seeing an increase in earnings.
The services sector was the most upbeat this month, with 21.1 percent seeing better times ahead for the economy, well ahead of other sectors. Retailing was next with a net 8.7 percent upbeat, followed by agriculture on 8.3 percent and manufacturing on 6.6 percent. By contrast, confidence in the economy among construction firms was at zero, meaning optimists matched pessimists.
Export intentions improved to 38.3 percent from 37.7 percent a month earlier, while investment intentions were unchanged at 23.5 percent. Those expecting to hire more staff rose to 23.6 percent from 21.5 percent, while those seeing higher profits rose to 27.7 percent from 25.8 percent. More companies saw room to raise prices – a net 30.2 percent had positive pricing intentions this month, up from 29.2 percent in April.
Inflation expectations increased to 2 percent – the Reserve Bank's target – from 1.83 percent in the April survey. A net 61.4 percent of those surveyed expect interest rates to rise, down from 64.3 percent in April. ANZ's composite indicator of business and consumer confidence pointed to economic growth of 3.5 percent to 4 percent.
NZ 1ST QUARTER TERMS OF TRADE BEST IN 44 YEARS
New Zealand's terms of trade rose to the highest level in about 44 years in the first quarter as export prices rose more than three times faster than imports, led by dairy and forest products.
The terms of trade rose 5.1 percent in the first quarter, Statistics New Zealand said, beating the 3.9 percent increase forecast by economists in a Reuter's survey. Export prices rose 9 percent in the first three months of the year and import prices gained 2.7 percent. Terms of trade is a measure of the purchasing power of New Zealand's exports abroad. The latest rise means 5.1 percent more goods imports could be funded by a fixed quantity of goods exports than in the December 2016 quarter. The value of exports rose 3.4 percent to $11.8 billion, seasonally adjusted, in the first quarter, while the value of imports rose 6.2 percent to $13.2 billion but export volumes fell 4.2 percent while import volumes rose 1.2 percent. "The terms of trade sit just 0.3 percent below the record high set back in June 1973. And with export prices still very healthy over recent months, we expect it is only a matter time before a new record is set," economists at ASB Bank said in a note.
