1 Mar 2012

Business optimism may be ahead of reality

5:52 am on 1 March 2012

An economist says while businesses are feeling more optimistic about the economy's prospects this year, the reality may be a little different.

The National Bank Business Outlook for February shows a net 28% of businesses expect the economy to pick up this year, up 11 points from the end of last year.

Of those questioned, 31% think their own businesses will improve, up five points from December.

National Bank chief economist Cameron Bagrie says while it is a good sign businesses are feeling optimistic, the reality may be different.

He says he's cautious about what it will mean in terms of actual growth across the economy in 2012.

Mr Bagrie says the 4% growth suggested by the survey is likely to a stretch, and growth of 2 - 3% would be a reasonably successful year for New Zealand.

He says there's a gap between expectations and reality, and it's important to acknowledge global challenges.

But Mr Bagrie says it's encouraging that after watching and waiting, businesses seem to have decided that they are going to get on with it.