29 Jul 2016

Strong business confidence takes a turn

4:54 pm on 29 July 2016

Business confidence has eased for the first time in five months but firms remain upbeat about their own prospects.

Cameron Bagrie - ANZ Chief Economist

ANZ chief economist Cameron Bagrie Photo: RNZ / Alexander Robertson

Sentiment slipped, with a net 16 percent of firms optimistic about the coming year from a six-month high of 20 percent in June, the ANZ Business Outlook survey for July showed.

ANZ chief economist Cameron Bagrie said the construction and services sectors were the pace-setters, with agriculture still lagging behind.

He said the economic outlook was positive with a net 32 percent of firms optimistic about the prospects for their own business - down from 35 percent the month before - and that was still a sign of the economy's underlying strength.

But he warned that a surging housing market, increased borrowing and lower savings were signs consumers wanted to spend their way to growth rather than earn it.