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NZ business confidence lifts in April

NZN 29/04/2016 Paul McBeth

New Zealand firms were more optimistic about the economic outlook this month as a buoyant construction sector remains central to the country's growth in the coming year, ANZ Bank New Zealand says.

A net 6.2 per cent of firms surveyed in the ANZ Business Outlook in April were upbeat about the economy's prospects for the year ahead, up from 3.2 per cent in March, and 32 per cent anticipate their own activity to expand, compared with 29 per cent a month earlier. Construction is still the most optimistic sector in terms of the wider economy and its own activity, and residential investment intentions were unchanged at 36 per cent, while commercial construction intentions slipped to 24 per cent from 30 per cent.

"The broader survey continues to point to solid economic momentum of around 3 per cent growth," chief economist Cameron Bagrie said in his note.

Business confidence took a dent last year as milk prices slumped, weighing on the outlook for the country's dairy sector, and their inability to pass on rising costs kept firms pessimistic in the New Zealand Institute of Economic Research's quarterly survey, which doesn't cover the farmers.

Friday's ANZ report showed the agriculture sector was the most pessimistic with a net 27 per cent predicting the economy will deteriorate over the coming year, and just 6 per cent expect their own activity to improve.

A net 16 per cent intend to pull back on livestock investment, compared to 4.9 per cent in March, and a net 18 per cent anticipate reduced profits in the coming year, the only sector to predict weaker earnings.

Across all sectors, a net 16 per cent of firms see bigger profits in the coming year, up from 13 per cent in March, and 22 per cent see an increase in exports.

About 35 per cent of those surveyed see interest rates coming down, compared to 39 per cent a month earlier, while just 0.5 per cent say it's easy to get credit..

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