1 Apr 2014

Business confidence booming - survey

7:12 am on 1 April 2014

Businesses continue to feel confident about their prospects but there may not be much slack in the economy's capacity come the middle of the year, an analyst says.

ANZ's monthly business confidence survey shows a net 67 percent of firms are optimistic about general prospects in March - down four points on February but still at an elevated level.

Confidence across all the major sectors is above 50, which signals a broad-based expansion.

The bank's composite growth measure, which combines business and consumer confidence, signals the potential for annual economic growth is about 6 percent by mid-year.

But ANZ chief economist Cameron Bagrie said the economy did not have the capacity to grow that fast.

General business confidence was up around the top 5 percent of outcomes seen historically and, right across the board, firms had high expectations for such things as profitiability and employment.

"By and large, the economy has still got a pretty firm spring in its step. On the face of it, the survey suggests we could be getting 60 percent growth.

"I still think that's pie-in-the-sky sort of stuff but you step back and I guess the underlying message here is that things look pretty good."

All up, 27 percent of businesses expected to hire more staff in the coming year, which was "extraordinarily" high, Mr Bagrie said.