NZ business confidence high in the skyOctober 1 - 9am
New Zealand business confidence climbed to a new five-year high, with construction firms still the most upbeat on profits, hiring and investments even as their optimism softened.
A net 54 per cent of firms expect general business conditions to improve in the year ahead, up from 48.1 per cent in August and the highest since March 1999, according to the ANZ Business Outlook survey.
Firms seeing a pickup in their own business activity in the year ahead rose to a net 45 per cent from 43.3 per cent.
The construction sector was the most bullish about the outlook for the economy, though the proportion seeing better times ahead slipped back to 68.2 per cent from 71.9 per cent in August and own activity outlook fell back to 41 per cent from 68.8 per cent. By contrast, the services sector improved on both measures, to 63 per cent and 53.8 per cent respectively.
Building firms were more upbeat about profits, with 50 per cent seeing an increase in the year ahead, up from 43.8 per cent in last month’s survey. But expectations for residential and commercial construction both slipped.
Increased profit expectations across all sectors jumped to a net 33.5 per cent, a 14-year high, from 25 per cent in August.
“We’re long past recovery,” said Cameron Bagrie, chief economist at ANZ New Zealand. “It’s a strong picture across the board, both by sector and region.”
Export intentions slipped a tad, with a net23.2 per cent seeing a pickup in the year ahead, down from 24.1 per cent in August, perhaps indicating the impact of a continuing high kiwi dollar.
Hiring intentions edged up to 18.8 per cent from 18.1 per cent. A net 20.4 per cent of firms surveyed expect to increase investment in the year ahead, up from 17.3 per cent in August.
Inflation expectations remained relatively subdued, at 2.31 per cent in the year ahead, down from 2.33 per cent in August. Still, pricing expectations rose to 29.9 per cent from 28.6 per cent.
“The inflationary risks are starting to look one sided,” Bagrie said. “We’re seeing more of a drift upwards in pricing expectations.”
That was led by the construction sector in the latest month, with a net 54.5 per cent expecting to raise prices, up from 43.8 per cent in last month’s survey.