21 Dec 2012

Firms may be overly optimistic - ANZ

7:44 am on 21 December 2012

ANZ bank says businesses may be overly optimistic about the future, and need to align their expectations more closely with those of consumers.

The bank's latest survey shows business confidence dipped slightly in December after rising in the previous month.

Nearly a net third of firms expected an uplift in their own activity, and employment over the next year, while a net 23% expected general economic conditions to improve.

ANZ chief economist Cameron Bagrie says businesses appear to have been overly confident in their expectations over the last few years, which have failed to match reality.

"I guess what we've seen for the past couple of years is that business confidence has been reasonably upbeat and consumer confidence has been flatline.

"So you've had a bit of a mismatch here between the producer saying 'we're going to produce' and the purchaser saying 'well we're not really interested in buying'."

Mr Bagrie says looking at a combination of both business and consumer confidence, it's likely that the annual GDP growth will be about 2% early next year.