New Zealand business confidence rose in May and firms saw rising exports, employment, profits, prices and inflation, suggesting the domestic economy continues to enjoy reasonable growth.
A net 15 per cent of companies surveyed in the ANZ Business Outlook expect general business conditions to improve over the coming year, up from 11 per cent in April. A net 38.3 per cent see better times ahead for their own business, edging up from 37.7 per cent, but still above the long-run average of 28 per cent, and profit expectations rose 1.9 points to a net 27.7 per cent seeing an increase in earnings.
"The economy's excellent adventure continues," ANZ Bank New Zealand chief economist Cameron Bagrie said in his report. "Firms are upbeat, and prepared to hire and invest. That's an economic expansion that is still going full steam. Survey indicators are elevated but not stratospheric, consistent with the economy evolving into a mature stage of the expansion; we're growing nicely off a good base, as opposed to lifting rapidly off a low level."
Bagrie said ANZ's composite indicator of business and consumer confidence pointed to economic growth of 3.5 per cent to 4 per cent.
The survey comes after last week's release of the government's Budget 2017, which included the Treasury's assessment that economic growth would accelerate to a peak of 3.8 per cent in 2019, up from the 2.9 per cent rate it had previously forecast. The economy has been underpinned by an expanding population, record tourism, a recovery in dairy prices, and robust consumer spending over the past year and is now set to receive more stimulus from the government's budget strategy of spending down futures surpluses on tax cuts and infrastructure.
