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Business confidence perks up in June

NZN 30/06/2016 Paul McBeth

New Zealand businesses grew more optimistic this month as strong construction and tourism sectors continued to support economic activity.

A net 20 per cent of firms surveyed in the ANZ Business Outlook expect better economic conditions in the coming year, up from a net 11 per cent in May, and reaching a six-month high.

They were even more upbeat about their own businesses, with a net 35 per cent expecting an increase in their own activity, compared to 30 per cent a month earlier.

Construction and services firms were the most upbeat when it came to expecting the economy to improve, and a net 59 per cent of construction firms and 39 per cent of services firms predicted their own activity expanding.

"The past month has hardly seen a suite of good news, yet the good still outweighs the negatives," ANZ chief economist Cameron Bagrie said.

"A firming in business sentiment, firms' own activity expectations and other components of the survey flag accelerating economic momentum."

New Zealand's economy has been supported by a housing boom driving construction activity, primarily in Auckland, where there's a shortage of supply, and as a record number of tourists visit the country.

At the same time, record net inflows of migrants have driven up demand for consumer goods and housing, while also filling a growing number of jobs and keeping wages static.

The ANZ survey of 399 firms showed the agricultural sector was still pessimistic about the economy with a net 17 per cent expecting it to deteriorate.

Across all sectors, firms were more optimistic in their profit expectations with a net 22 per cent seeing an increase, up from 20 per cent in May.

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