Growing optimism in our main trading partners is good news for New Zealand, according to Paul Kane, Partner, Privately Held Business, at Grant Thornton New Zealand.
Commenting on the recently released Grant Thornton International Business Report (IBR) survey, which showed big jumps in business optimism in China, Australia, the United Kingdom and the United States, Kane believes this will be reflected in higher demand for New Zealand products and services.
“China, our biggest trade partner, has seen business optimism rise from 31% at the end of the third quarter last year to 55% to the same period this year. Australia has gone from 23% to 53%, the United Kingdom 76% to 82% and the United States 52% to 69%.
“China and Australia are our two biggest trading partners, so optimism in their markets is good for New Zealand. The significance of the rise in Australia should not be overlooked as their economy impacts ours in so many ways, not only trade, but also immigration. Perhaps this rise in their confidence will see a strengthening in numbers of people moving across the Tasman to live.
“Even if this does occur, migration to New Zealand is so strong that it will have little impact on these numbers overall, with no respite for areas such as the Auckland housing market.
“New Zealand’s business confidence has also increased in that time from 64% to 80%, although it did peak at 88% in the first quarter this year,” he said.
Kane feels that this uplift in confidence will keep New Zealand’s levels high for some time.
“The survey ranks New Zealand as the third most optimistic country of the 34 surveyed, behind India (95%) and the United Kingdom (82%) and level with Ireland. It really does indicate exactly where our economy sits and although we may have dropped slightly from the 88% peak at the end of the first quarter, several others have also come off their highs.
“As a country, we’re actually travelling pretty well.”