Business confidence gains as profit, hiring and investment intentions rise
New Zealand business confidence rose this month as firms became more upbeat about the outlook for profits, hiring and investment. Canterbury was the most upbeat region.
A net 26% of respondents in the ANZ Bank Business Outlook expect general business conditions to improve in the year ahead, up from 17.2% in the previous month's survey. Those expecting a better 12 months out of their own businesses rose to 32% from 25.5%.
Improved hiring intentions bode well for an economy where the unemployment rate is 7.3% and Australia is seen as a good choice for an increasing number of kiwi workers.
Hiring intentions were firmest in the construction sector, with a net 31% of companies planning to take on more workers as the rebuild of Christchurch picks up steam.
Strong readings in Canterbury "tie in with increasing signs of rebuild-related activity, a dynamic that will become more pronounced in the economic data over 2013", says Cameron Bagrie, chief economist at ANZ Bank New Zealand
At the same time there is little concern about rising prices, with inflation expectations slipping back to 2.24%, the lowest since October 1999, from 2.36% in last month's survey.
That meshes with perceptions in the Reserve Bank's survey of expectations this week and underlines that there is little pressure on the bank to hike interest rates any time soon. The next monetary policy statement is scheduled for release on December 6.
Exports remain the weak spot in the economy, Mr Bagrie says. A net 17% of exporters are expecting a pickup in the year ahead, up from 14% in the previous month, though still at a "timid" level. The high kiwi dollar is probably the root cause.
The kiwi recently traded at 82.39 US cents from 82.11 cents yesterday. It has held above 80 cents since early September.