Business confidence rebounds post quake

Photo / Simon Baker

Business confidence rebounded during April lead by a dramatic improvement in headline confidence in Canterbury, the latest National Bank Business Outlook shows.

Headline confidence rose 59 points in Canterbury after falling 92 points last month, while firms' own activity expectations in the region lifted 35 points.

"A recovery in general business confidence is one thing. But the litmus test for the economic outlook is surely what firms anticipate for their own business," National Bank chief economist Cameron Bagrie said.

Nationally a net 14 per cent of businesses expected better times for the economy in the coming year, up 23 points on last month.

Meanwhile firms' own activity expectations lifted 15 points, to a net 30 per cent expecting improvement in the year ahead.

The recovery of two-thirds of the fall in activity seen in March was encouraging, the report's author, Cameron Bagrie said.

The same story of improvement was apparent across other key gauges within the survey, with employment outlook moving back into the black and profit expectations also up.

Residential investment intentions surged, with a net 48 per cent of businesses are expecting better times ahead.

Canterbury employment intentions lifted 36 points, fully reversing the March decline. Residential investment intentions were strongest in Canterbury, with a net 80 per cent expecting better times ahead.

Meanwhile a whopping 86 per cent expect better times for commercial construction, dwarfing commercial perceptions in all other regions.

"The April edition of business confidence suggests the material fall in March was more "shock and awe" than substance.

"This is not to downplay the significance of the February earthquake. It is an event of epic proportions. There are still hurdles for the economy. But glimpses of recovery in early 2011 look to be getting back on track. And we suspect sooner rather than later," Bagrie said.

- NZ HERALD ONLINE