28 Apr 2011

Things are looking up again - Bagrie

7:45 am on 28 April 2011

A leading bank economist says conditions are right for an improvement in business confidence and thus more spending and investment.

The National Bank's monthly business outlook survey shows that a net 14% of firms expect the economy to improve in the next year. In February, a net 9% expected it to worsen.

Firms' own activity expectations - a key gauge of what businesses think about their own prospects - rose sharply, and now a net 30% expect improvement over the year ahead.

The National Bank's chief economist, Cameron Bagrie, says businesses have absorbed the shock of the Christchurch earthquake and are looking forward again.

Mr Bagrie says sentiment is also being boosted by an underlying improvement in the economy coupled with last month's cut of 50 basis points in the Official Cash Rate.

He says he's hoping the latest rebound in confidence will get firms boosting their headcounts and investing more in their businesses.

The New Zealand dollar slipped slightly against its US counterpart overnight, and is trading at 80.4 US cents.