18 Dec 2018

Business confidence perks up

3:25 pm on 18 December 2018

Business confidence has improved to its best level in eight months.

The ANZ Bank monthly survey showed a net 24 percent of firms expect general business conditions to get worse over the coming year, compared with 37 percent in the November survey.

However, the own activity measure, regarded as a better indicator, has nearly doubled with nearly 14 percent optimistic about their own outlook.

"There is a degree of wariness, but the sky hasn't fallen. Firms ... are now once again intending to employ and invest," ANZ chief economist Sharon Zollner said.

The survey showed businesses are also expecting to export more, their profit outlook to improve, and interest rates to stay low.

Agriculture remained the most pessimistic part of the economy well ahead of the manufacturing and retail sectors.

Ms Zollner said the economy was in a position that meant the Reserve Bank could keep interest rates on hold for the foreseeable future.

She said the international environment remained a major risk.

"Global economic data appears to be rolling over to some degree, including in our major trading partners. And while China's demand for our commodities remains seemingly insatiable for now, it is prone to cycles just like anything else," Ms Zollner said.

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