Firms see better times ahead

Last updated 10:29 11/03/2014

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A net 66 per cent of firms expect the economy to be better a year from now, a Bank of New Zealand survey shows.

The survey, carried out on March 4, included just under 500 businesses.

The result was almost as high as the previous month's net 68 per cent expecting an improvement.

Construction, dairying and agricultural services are especially strong, but the lift in confidence is widespread.

The survey suggested strong economic growth this year, which was expected to prompt the Reserve Bank to start raising official interest rates on Thursday from 2.5 per cent to 2.75 per cent, reaching 5 per cent by the end of next year.

The construction sector looked "very strong".

An Auckland kitchen-cabinetmaker said there was "huge demand", and the company was turning away work almost daily.

"The next five years are going to be full and profitable," the company said.

The dairying sector looked "extremely good", and a farm engineering services company said it had been busy in the normally quiet Christmas period.

The company was buying new equipment and hiring more staff.

Engineering firms were seeing strong business, although not so much for those exposed to Australia.

Food manufacturers were also finding exports hard, with more competition in New Zealand from Australian goods.

Forestry was seeing strong exports to China, but timber milling was being hit by high log prices.

Manufacturers with a domestic focus were doing well, but those selling to Australia were struggling because of the high exchange rate.

The survey showed a net 11 per cent of firms were happy that house prices were rising.

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- Fairfax Media

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