New Zealand businesses became more negative about the overall state of play in March, although were more optimistic about their individual prospects.

A net 3 per cent of firms were optimistic about the general outlook for the economy in 2016, down from a net 7 per cent a month earlier, according to the ANZ Business Outlook survey of 444 companies. The agricultural sector was the most pessimistic, with a net 45.8 per cent expecting business conditions to deteriorate over the coming year.

Companies were more positive about their own business activity, with a net 29 per cent expecting to see growth, up from 26 per cent in February, and a net 13 per cent see bigger profitability in the year ahead, compared to 12 per cent. Firms pared export expectations to a net 21 per cent from 23 per cent in February.

"Business confidence remains in the dog house - however, firms are more optimistic about the outlook for their own business and this is a far more important signal for economic direction," ANZ Bank New Zealand chief economist Cameron Bagrie said.


Bagrie said the North Island appeared far more optimistic while the South Island "looks like it has been collared more by dairy unease."

The survey showed investment intentions fell to a net 11 per cent expecting to spend more in the coming year, from a net 14 per cent in February, though employment intentions rose to 16 per cent from 12 per cent. A net 1.7 per cent expect easier access to credit, from 10.6 per cent in February.

Residential construction activity is expected to grow by a net 36 per cent of firms, up from 14 per cent in February, while commercial construction intentions rose to 30 per cent from 24 per cent.

Pricing intentions edged down to a net 17.7 per cent expecting to raise them in the coming year from a net 17.8 per cent in February. Inflation expectations dipped to 1.38 per cent from 1.39 per cent, and a net 38.6 per cent see interest rates falling in the coming year compared to 37.3 per cent a month earlier.