28 Mar 2013

Business confidence eases back

8:07 am on 28 March 2013

Business confidence has eased back from a 19-month high, but firms remain cheered by the economic outlook.

ANZ's monthly business confidence survey shows a third of companies expect their own business to grow in the next 12 months, more than 5% lower than in February.

Nearly 35% of respondents expect the economy to improve over the year ahead, compared with nearly 40% last month.

ANZ Bank chief economist Cameron Bagrie the housing market is picking up quite strongly, there is still the rebuilding of Canterbury to look forward to and the global situation seems to be reasonably settled at the moment.

But there are still some worrying signs such as the high New Zealand dollar, fiscal policy contraction and drought conditions.

The number of firms expecting to raise prices has risen from 18 to 22, while employment intentions have fallen.

Export expectations improved, but investment and residential investment intentions weakened, and firms expect lower profits and interest rates.

The Reserve Bank of New Zealand is expected to hold its Official Cash Rate at a record low 2.5% for the rest of the year.