Confidence and sentiment rebounds
Australasian Capital Confidence Barometer
The Barometer shows that organisations are significantly more optimistic about the year ahead, with 90% of Australasian respondents saying the local economy is improving or stable, up from 82% in October.
The sentiment in the global economy is also promising, with 89% of Australasian respondents saying it is improving or stable, up from and 74% last Barometer.
75% and 86% of Australasian respondents respectively tip the local and global economies to grow by 1% or more, but most recognise it is unlikely to reach peaks last seen in 2006—07. The economic uncertainty that followed that period has been so drawn out and pervasive that typical cyclical behaviours have changed.
| What is your perspective on the state of the global economy today? || What is your perspective on the state of the local economy today? |
Greater stability on global stage
Confidence is being driven by a number of factors, particularly stronger equity markets, increased certainty around growth in China, some resolution of the US fiscal cliff and despite the Cypriot debt crisis, confidence in relative Eurozone stability.
The potential for slowing growth in emerging markets is of some concern, with 42% of Australasian respondents saying they believe it is the greatest economic risk they face over the next 6-12 months.
However, generally organisations remain upbeat with 57% of Australasian respondents remaining optimistic, but acknowledging they will apply further rigor when assessing deals in developing countries.
|90%||of Australasian respondents believe the local economy is improving or stable|
Positive signs at home
Closer to home, the February corporate reporting season in Australia was generally positive and the run of interest rate cuts has contributed to modestly improving business sentiment, reflected in retail sales and property prices. The announcement of the Federal Government election in Australia is top of mind for executives as different policy alternatives, and their potential impact, emerge.
In New Zealand, confidence is also growing. Property prices are on the rise, export levels are picking up and there are now brighter prospects for employment – all amidst very dry conditions bought on by a drought felt in many parts of the country.
|58%||of Australasian respondents are confident in their corporate earnings|
Promising signs across all major growth indicators
This Barometer shows confidence among Australasian and global respondents across all growth indicators has stepped up significantly. Economic growth and corporate earnings topped the chart with 68% and 58% of Australasian respondents respectively expressing confidence at a global level.
The outlook for employment is surprisingly more positive with 44% of Australasian respondents expecting to create jobs and hire talent over the next 12 months, up from 21% last October.
|44%||of Australasian respondents expect to create jobs and hire talent over the next 12 months|