BNZ survey shows confidence highest since 2005

The Bank of New Zealand (BNZ) Confidence Survey has indicated that confidence in the economy is at its highest level since the survey began in 2005. A net 27% of respondents expected the economy to get better over the year. The BNZ asks if people think the economy will get better, worse or stay the same over the next 12 months. Of the 264 respondents, 51.5% replied better, up from 29.6% a month ago. There were 23.9% who expected it to stay the same, down from 29.3% a month ago, and 24.6% of respondents expected the economy to get worse in the next 12 months, down from 41.1%. "It seems reasonable to conclude that the worst is over for the New Zealand economic cycle, but we still remain of the opinion growth next year will be relatively mild and it is not valid to speak in terms of above average growth in the New Zealand economy until 2010 or optimistically late 2009," said BNZ Chief Economist Tony Alexander. The survey outlined broad themes of specific sectors. For residential property it said "activity picking up with the arrival of spring, prices declining with the vendors more realistic but bargain hunters still over-optimistic." It said the finance sector was "very tight," and the vehicle industry "overwhelmingly poor." Tourism was "very tough with some fresh signs of deterioration evident." The BNZ survey shares a strong correlation with the National Bank's Own Activity Survey - itself a good indicator of GDP growth.