Kiwi confidence in tiger territory
New Zealand business optimism has skyrocketed, placing us fifth in the world, according to a new survey.
The Grant Thornton International Business Report showed New Zealand's business confidence had jumped to 74 per cent in the fourth quarter, from 64 per cent in the previous quarter.
The quarterly survey of 3250 businesses from 45 countries included 50 Kiwi businesses.
New Zealand came in behind the United Arab Emirates and the Philippines (both 90 per cent), Peru (84 per cent) and Indonesia (78 per cent).
However, overall global confidence levels dropped from 32 per cent to 27 per cent during the same period, the results showed.
Grant Thornton New Zealand partner Paul Kane said that for the first time in many years New Zealand was favoured by a growing local economy and renewed international interest following the global financial crisis.
"Much has already been noted in relation to the Christchurch rebuild, Auckland housing construction and booming dairy prices, but the sleeping giant of Asia is now starting to have a major influence on the New Zealand economy," Kane said.
He said the fact the Philippines, with a population of 99 million, was ranked first-equal in business confidence, and Indonesia, with 237 million, was ranked fourth, was of great interest.
Both countries had emerging middle classes, he said, adding that Indonesia was New Zealand's second-closest major trading partner after Australia.
"When you add the combined populations of India and China (2.5 billion) with the other growing economies of Korea, Taiwan, Malaysia, Thailand, Vietnam and Cambodia, then the potential is unlimited," he said.
New Zealand was already starting to see the first glimpses of these influences, Kane said.
The appetite for Kiwi agricultural products appeared to have no bounds, the demand for educational facilities was growing with students returning to Christchurch, and tourism, especially from China, was growing exponentially, he said.
Statistics NZ said exports to China for the November were $1.2 billion, a rise of $544 million or 80 per cent. This was the highest value for exports to China for any month, which along with the record high in October, had resulted in China overtaking Australia as New Zealand's top exports destination on an annual basis, Statistics NZ said. Kane said it was important to think about all of Asia and not just China.
The other good news for the New Zealand economy was that Australian confidence almost doubled to 42 per cent from 23 per cent, he said.
Almost 70 per cent of New Zealand businesses surveyed expected an increase in profit in 2014, which ranked New Zealand fifth in the world in this category behind India, Peru, Taiwan and Indonesia.
However, the optimism had not yet translated into jobs across the board, Kane said. He said "the foundations look really good" and job growth was on the horizon.
"The good news for employees is that 86 per cent of New Zealand businesses intend giving a pay rise in 2014, ranking us seventh in the world in this area."
- © Fairfax NZ News