Business confidence at 20-year high
Business confidence is at its strongest levels since 1994, according to an ANZ Bank survey.
Confidence is high, despite the strong headwinds from a high New Zealand dollar and expectations that interest rates will rise this year.
In 1994, the economy posted economic growth of 6 per cent.
ANZ's composite indicator, including both business and consumer confidence, suggests the potential for annual growth of about 6 per cent by the middle of this year.
However, ANZ was picking "strong growth" this year, not "incredibly strong" growth, it said.
The survey showed a net 71 per cent of firms were optimistic about general prospects, the best reading since March 1994.
Firms' activity expectation about their own business was at a net 59 per cent positive, the highest since mid-1994.
And a net 32 per cent of firms expect to hire more staff, the highest reading since 1992.
Investment intentions are also strong at a net 35 per cent positive.
The survey also shows a net 33 per cent of firms expecting to raise prices.
Inflation expectations are trending up (2.6 per cent, off a low of 2.2 per cent), and pricing intentions in the construction sector are the highest since 1992.
"The official cash rate is set to move higher. We're on notice," ANZ said.