NZ business confidence lifts in November

Construction companies are planning to take on more workers as the Christchurch rebuild picks up steam. Photo / Geoff Sloan

New Zealand business confidence rose this month as firms became more upbeat about the outlook for profits, hiring and investment. Canterbury was the most upbeat region.

A net 26 per cent of respondents in the ANZ Bank Business Outlook expect general business conditions to improve in the year ahead, up from 17.2 per cent in the previous month's survey. Those expecting a better 12 months out of their own businesses rose to 32 per cent from 25.5 per cent.

Improved hiring intentions bode well for an economy where the unemployment rate is 7.3 per cent and Australia is seen as a good choice for an increasing number of kiwi workers.

Hiring intentions were firmest in the construction sector, with a net 31 per cent of companies planning to take on more workers as the rebuild of Christchurch picks up steam.

Strong readings in Canterbury "tie in with increasing signs of rebuild-related activity, a dynamic that will become more pronounced in the economic data over 2013", said Cameron Bagrie, chief economist at ANZ Bank New Zealand

At the same time there's little concern about rising prices, with inflation expectations slipping back to 2.24 per cent, the lowest since October 1999, from 2.36 per cent in last month's survey.

That meshes with perceptions in the Reserve Bank's survey of expectations this week and underlines that there's little pressure on the bank to hike interest rates any time soon. The next monetary policy statement is scheduled for release on Dec. 6.

Exports remain the weak spot in the economy, Bagrie said. A net 17 per cent of exporters are expecting a pickup in the year ahead, up from 14 per cent in the previous month though still at a "timid" level. The high kiwi dollar is probably the root cause.

The New Zealand dollar recently traded at 82.39 US cents from 82.11 cents yesterday. The currency has held above 80 cents since early September.