28 Jul 2011

Business confidence rises - survey

6:46 am on 28 July 2011

A key survey shows business confidence continued to improve over the past month.

Economists at the National Bank say their monthly survey points towards economic growth of 5% in the next 12 months.

The monthly survey says optimists continue to outweigh pessimists, with a net 48% expecting better times for the economy in the coming year, up from 47% last month.

When businesses were asked about their own prospects, the improvement was even more marked, with a net 44% of respondents optimistic compared to 39% in June.

The construction industry was the most upbeat, with a net 60% expecting better times for the economy and only slightly fewer looking forward to improvement for their own firms' prospects.

National bank chief economist, Cameron Bagrie, says the improvement comes despite softening commodity prices, a high New Zealand dollar and firming expectations of interest rate rises.

He says the improving business confidence will translate into strong economic growth in the year ahead of least 4%.