Firms more upbeat, but exporters wary
Businesses are becoming more upbeat about the year ahead, pointing to economic growth of just more than 2 per cent, according to a bank survey.
However, the latest ANZ Bank Business Outlook survey shows exporters are lagging behind, with a timid level of confidence in the face of a high New Zealand dollar.
The construction sector remains the most upbeat.
Both residential and commercial building confidence is high for the year ahead because of the Canterbury rebuild and the growing recovery from a dire downturn in the past couple of years.
The survey shows that overall, a net 26 per cent of businesses expect general business conditions to get better over the year ahead. That was up from a net 17.2 per cent last month.
A net 32 per cent of firms expect more activity out of their own business over the coming year, up from almost 26 per cent. The latest level is around the average in the past three years, when the economy has grown about 2 per cent a year.
The business confidence levels, combined with recent consumer confidence figures suggested economic growth of 2.1 per cent in the year ahead, ANZ said.
"This looks solid enough on the face of it, but the past few years have taught us that expectations and reality do not always align," ANZ warned.
The economy officially grew 2 per cent in the year to June.
Business confidence is back above "average" and sentiment improved across all sub-components.
Profit expectations, hiring plans, and investment intentions are all getting better.
A net 10 per cent of businesses expect profits to improve.
A net 6 per cent of firms expect to hire more staff, and a net 17 per cent anticipate more investment.
"All good on the face of it, although as recent lifts in the unemployment rate attest, reality does not necessarily match expectations," ANZ said.
Questions surround whether hiring will be enough to mop up new workers as they move into the job market. "Our bugbear remains the timid level of export confidence," ANZ said.
A net 18 per cent of exporters expect an uplift.
"The very high currency is clearly continuing to hurt exporters," ANZ's economists said.
The Dominion Post