New Zealand business confidence eased in May although the outlook on general business prospects remained positive, results of a survey by ANZ Bank showed Wednesday.
The balance of business confidence slipped 11 points from the previous month's score to 53.5 in May. This is also 17 points below February's peak.
The slide in confidence can be attributed to higher interest rates, fall in commodity prices, high NZ dollar and leveled out house prices, the survey showed. However, though confidence in all sub-sectors eased in May, the levels of confidence remained well above average.
Activity expectations of firms regarding their own business fell to 53 points from 51 points in April, still remaining close to double the long-term average. Expected profitability fell for the third consecutive month, but at 31, the situation still augurs well for investment and employment.
Thirty percent of businesses are expected to hire more staff over the year, the same score as in the previous month. Investment intentions, though remaining higher than average, fell to 23 in May from 30 in April. Export intentions dropped to 25, leveling with October 2013.
Residential construction activity is expected to rise by 63 percent and construction activity by 59 percent, with the confidence indices rising to 63.2 and 58.8, respectively, in May.
The survey showed that the composite growth indicator signals a potential 5.7 percent growth in economy.
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