29 Jun 2017

Agriculture, commodities boost confidence

4:52 pm on 29 June 2017

Strong commodity prices and a buoyant agriculture sector have helped push business confidence to a nine-month high.

Potato fields in Pukekohe.

Photo: RNZ / Olivia Allison

ANZ's Business Outlook for June showed 25 percent of firms were optimistic about the year ahead, 10 points higher than the previous month.

A net 43 percent expected better times for their own business, the highest reading in three years.

More firms planned to invest in their own businesses and more expected their profits to rise.

The number of businesses planning to raise their prices in 12 months reached the highest point in more than three years. However, that number dipped in most sectors except agriculture, which dragged the figure higher.

Chief economist Cameron Bagrie said the strength was across all sectors and all regions but notably in agriculture.

"New Zealand businesses out there are in a very good space," he said.

"Those are very bouyant figures and point to economic growth accelerating, or at least on a very firm footing into the back half of 2017 so I'm expecting the New Zealand economy to put up some very good numbers in the next six to nine months."

Mr Bagrie said firms' biggest challenge was filling jobs but many reported plans to boost staff numbers.

He said GDP annual growth was expected to lift back above three percent by the end of the year.

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