KEY POINTS:
New Zealand business confidence has risen to a three-year high, although pessimists sill outweigh optimists, the National Bank said today.
The bank's February business outlook showed a net 6 per cent of respondents expected business conditions to deteriorate over the coming year, the most confident survey in three years.
Companies continued to expect their own business to improve, with a net 25.7 per cent optimistic about the next year, up from 24 per cent in the last survey.
Inflation expectations eased but pricing intentions rose to a five-month high, and companies were also positive about investment, and employment intentions, said bank chief economist Cameron Bagrie.
"Against this backdrop, the Reserve Bank's patience is running out. The end-game is supposed to be moderating growth and easing medium-term inflation pressure, themes that are counter to what the survey is portraying," Mr Bagrie said.
"Brace for at least one late cycle interest rate move. After repeatedly ignoring the Reserve Bank's warnings, notably towards housing related investment, we only have ourselves to blame," he said.
The construction sector remained the most optimistic, and agriculture was the most pessimistic.
A high New Zealand dollar was taking its toll on exporters, pushing export intentions to an 11-month low, but a strong domestic economy appeared to be a suitable alternative for some companies. Strong commodity prices were also providing some support.
The Reserve Bank releases its next decision on interest rates on March 8.
- NZPA
