31 Aug 2016

Business confidence holds firm in August

5:04 pm on 31 August 2016

Business confidence in New Zealand has held steady although firms are a touch more positive about their own outlook.

Building site in an East Auckland suburb

The construction sector remained strong despite the maturing Christchurch earthquake rebuild, ANZ chief economist Cameron Bagrie said. Photo: RNZ / Cole Eastham-Farrelly

The ANZ bank's survey for August showed a net 15.5 percent of companies were optimistic about the coming year, which was fractionally lower than July.

But businesses were slightly more confident for themselves, with nearly 34 percent expecting an improvement, compared with 31.4 percent in July.

The building and service sectors were the most confident, but agricultural based businesses trailed the survey although they were much less pessimistic.

ANZ chief economist Cameron Bagrie said confidence remained close to a 20 month high.

"Even sectors that have been struggling are showing improved or less bad signs of late.

"The rebound in dairy prices - while not eliminating the ongoing challenges faced by the sector - certainly helps to mitigate some of the extreme downside risks," he said.

Mr Bagrie said while inflation pressures remained subdued, firms intended to hire more staff and invest more, which pointed to a strong underlying economy.

"The construction sector pipeline remains massive despite a maturing earthquake rebuild, and the tourism sector continues to boom ... interest rates are historically low, and broad-based house price gains are providing households with a confidence and wealth boost," he said.

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