KEY POINTS:
A buoyant agricultural sector is keeping business confidence afloat in the face of global uncertainty and turbulent financial markets.
The National Bank's monthly survey found firms' views of their own prospects unchanged from August and recorded a rise in their expectations for general business conditions in the year
ahead.
Pessimists still outnumber optimists about the general outlook but by a smaller margin - a net 27 per cent instead of the net 34 per cent recorded last month.
Employment and investment intentions, and profit expectations all nudged higher.
Overall, the survey's indicators pointed to economic growth of around 2 per cent over the coming year, the bank's chief economist, Cameron Bagrie, said.
Yet slightly fewer firms expected to raise their prices, which was encouraging, he said.
The big improvement was in the agricultural sector, where a net 40 per cent of respondents expect better times (for themselves, not the wider economy) in the year ahead.
That is up from a net 22 per cent last month and is the highest reading for the sector since July 2001 when the New Zealand dollar was around US40c, not much more than half its current level.
Bagrie attributes the farm sector's optimism not only to surging export commodity prices but also to the fact that most of the survey's responses came in in the first half of the month, when the dollar dipped briefly below US70c. It has since rebounded to nearly US75c.
Manufacturers, by contrast, are taking a gloomier view of their prospects, with a net 4 per cent expecting their own activity to decline over the coming year, compared with a net 20 per cent expecting expansion just a month ago.
Manufacturers' export intentions are up, perhaps reflecting the fact that Australia is their main export market and the New Zealand dollar has fallen 5 per cent against the Aussie over the past two months.
But those manufacturers primarily exposed to the domestic economy, and especially the housing sector, faced headwinds, Bagrie said.
Construction firms' expectations of their own outlook have fallen sharply and their profit expectations are at levels not seen since 2000, when house prices were falling.
Overall, he said, the survey was heartening insofar as it pointed to long-awaited, and necessary, rebalancing of economy from the inward-facing sectors to the export sector.
In a nutshell
* General business confidence has improved
* It is the export sectors which are feeling more optimistic
* These results suggest the economy may be returning to a more even keel
