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.

(BusinessDesk)

This article is tagged with the following keywords. Find out more about My Tags

Comment & Question

Commenter icon key: Subscriber Verified

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7959 -0.0001 -0.01%
AUD 0.9075 0.0004 0.04%
EUR 0.6264 0.0040 0.64%
GBP 0.4941 0.0013 0.26%
HKD 6.1735 -0.0023 -0.04%
JPY 85.1880 0.1030 0.12%

Commods

Commodity Price Change Time
Gold Index 1248.5 4.340 2014-10-21T00:
Oil Brent 86.2 0.820 2014-10-21T00:
Oil Nymex 82.5 -0.260 2014-10-21T00:
Silver Index 17.5 0.190 2014-10-21T00:

Indices

Symbol Open High Last %
NZX 50 5233.1 5276.5 5233.1 0.80%
NASDAQ 4359.2 4419.5 4316.1 2.40%
DAX 8693.1 8889.8 8717.8 1.94%
DJI 16406.0 16620.8 16399.7 1.31%
FTSE 6267.1 6372.3 6267.1 1.68%
HKSE 23300.5 23375.9 23088.6 1.17%
NI225 15038.2 15129.1 14804.3 1.71%