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Business confidence rises to 9-month high

NZN 29/06/2017 Jonathan Underhill

New Zealand business confidence rose to a nine-month high in June, led by services and agriculture, suggesting economic growth is set to accelerate.

A net 24.8 per cent of companies surveyed in the ANZ Business Outlook this month expect general business conditions to improve over the coming year, up from 15 per cent in May.

A net 42.8 per cent see better times ahead for their own business, up from 38.3 per cent last month and the highest since July 2014.

ANZ Bank New Zealand's composite growth indicator is pointing to 4 per cent growth and while that would be "a stretch", the economy "is running faster than current real GDP growth (2.5 per cent) would suggest," said chief economist Cameron Bagrie.

The New Zealand economy has regained its traditional wings with the recovery in dairy prices adding to the impetus from record migration and tourism and a booming property market.

Confidence among farmers rose to a record in the second quarter, based on the latest Rabobank survey, buoyed by improving commodity prices.

Thursday's survey shows confidence among agricultural firms jumped to 26.6 per cent in June from 8.3 per cent in May, while in the services sector it climbed to 32.6 per cent from 21.1 per cent.

Manufacturing sector confidence improved, with a net 17.3 per cent seeing better times ahead, from 6.6 per cent in the May survey, while construction firm confidence was a net 7.7 per cent positive, compared to breakeven in the previous month.

Confidence among retailers improved to a net 12.5 per cent from, 8.7 per cent.

Not all the survey indicators were positive in the latest month. Export intentions dropped to 27 per cent from 31.3 per cent and hiring intentions only edged up to 24.3 per cent from 23.6 per cent. Residential construction tumbled to 18.2 per cent from 45 per cent, while commercial construction fell to 28.5 per cent from 36.8 per cent.

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