New Zealand businesses grew less gloomy about the economy's prospects in September, snapping five months of declining confidence, in a period when dairy prices rallied from their lows, soothing concerns about the strength of the nation's biggest export.
A net 19 per cent of firms were pessimistic about the general outlook for the economy over the coming year, an improvement on the net 29 per cent of pessimists in August, according to the ANZ Business Outlook survey. A net 17 per cent of firms see their activity expanding in the coming year, up from a net 12 per cent.
"After five successive months of declines in the headline figure - and substantial declines at that - the turnaround is welcome," said ANZ Bank New Zealand economist Philip Borkin. A rebound "was apparent across the broad survey, and importantly, in key survey indicators that more closely correlate to GDP (gross domestic product) growth".
Of the 468 respondents, a net 7.2 per cent expect to increase investment over the coming year, an improvement on the 0.4 per cent saying they would scale back investment, and a net 3.2 per cent anticipate taking on more staff over the next 12 months. Profit expectations also improved, with a net 5.5 per cent seeing increased returns in the coming year, compared to a net 1.5 per cent picking smaller earnings, and a net 23 per cent intend to raise their prices, up from 16 per cent a month earlier.
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• 17 per cent of firms expect their activity to expand, up from 12 per cent last month.
• 23 per cent intend to raise their prices, up from 16 per cent last month.
Source: ANZ Business Outlook survey