New Zealand firms grew more confident about the state of the local economy for the third month in a row, with gains most evident in construction, ANZ Bank New Zealand says.
A net 11 per cent of firms surveyed in the ANZ Business Outlook in May were upbeat about the economy's prospects for the year ahead, up from 6 per cent in April, with a net 30 per cent positive about their own prospects over the next year, compared with 32 per cent a month earlier.
Construction remained the most optimistic sector at net 29 per cent positive for the year ahead, with residential investment intentions flat at a net 36 per cent while commercial construction intentions rose to net 29 per cent from net 24 per cent.
"The economic trail remains well groomed - migration is strong, house prices are booming, the construction and tourism sectors are slaloming incredibly well," said chief economist Cameron Bagrie.
"New Zealand is in the enviable position of having credibility, competency, and stability in the government arena."
Business confidence dipped into negative territory last year as milk prices slumped and weighed on the dairy sector's outlook, but has been recovering in recent months.
Yesterday's ANZ report showed sentiment in the agriculture sector was still the most pessimistic, though it had improved with a net 19 per cent predicting the economy will deteriorate over the coming year compared to 27 per cent in April.
Across all sectors, a net 20 per cent of firms see bigger profits in the coming year, up from 16 per cent in April. Some 22 per cent of firms intend to raise their prices, though that was higher in the construction sector with net 30 per cent of companies set to increase prices compared to agriculture at net 9 per cent.
Fewer businesses see interest rates coming down, at a net 29 per cent from 35 per cent in April. Inflation expectations fell to 1.39 per cent from 1.42 per cent in April.
• Net 11 per cent upbeat about the economy's prospects for the year ahead.
• Net 30 per cent positive about their own prospects over the next year.
• Net 20 per cent of firms see bigger profits in the coming year.
• Net 21 per cent see an increase in exports.