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NZ business confidence still upbeat

NZ Newswire logoNZ Newswire 28/04/2017 Paul McBeth

New Zealand business confidence stayed upbeat in April as firms expect to see more activity on their own books and generate bigger profits. © Getty Images New Zealand business confidence stayed upbeat in April as firms expect to see more activity on their own books and generate bigger profits. New Zealand business confidence stayed upbeat in April as firms expect to see more activity on their own books and generate bigger profits.

A net 11 per cent of companies surveyed in the ANZ Business Outlook expect general business conditions to improve over the coming year, unchanged from March.

A net 38 per cent see better times ahead for their own business, down from 39 per cent a month earlier, but still above the long-run average of 28 per cent, and profit expectations rose 3 points to a net 26 per cent seeing an increase in earnings.

"Firms are optimistic about their own businesses, and still want to hire and invest," ANZ Bank New Zealand chief economist Cameron Bagrie said in his report.

New Zealand's economy has been underpinned by an expanding population, record tourism, a recovery in dairy prices, and robust consumer spending over the past year.

This has given the government confidence to boost infrastructure spending and target a more aggressive debt reduction target in an election year where tweaking tax settings has been dangled as a potential vote winner.

ANZ's survey of 374 firms shows companies lifted their investment intentions 3 points to a net 24 per cent expecting to boost capital spending, while a net 22 per cent want to take on more staff in the coming year, unchanged from March.

A composite of the business and consumer confidence surveys indicated the economy will grow at between 3.5 per cent and 4 per cent, however, Mr Bagrie said the "mellow trend" of Friday's figures are "consistent with the business cycle becoming more mature" and gross domestic product entering a period of slower expansion.

"While growth is respectable and we expect more of the same going forward if readings from the survey are anything to go by, a common criticism is the lacklustre performance from both productivity and GDP per capita," he said.

"Growth is being delivered by working harder, not necessarily smarter. Migration is becoming the scapegoat."

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