Business confidence continued to recover lost ground in May, rising for the third month in a row, according to the ANZ Business Outlook released yesterday.
ANZ chief economist Cameron Bagrie said the survey indicators that mattered the most for economic growth continued to flag solid economic momentum and annual gross domestic product (GDP) growth of 3%.
A net 11% of businesses were optimistic about prospects in the coming year. Gains were evident across all the sub-sectors. Construction remained the most upbeat sector and agriculture the least.
In the survey results scattered with skiing analogies, Mr Bagrie said it was "champagne powder'' for firms' own intentions.
A net 30% of businesses were upbeat about their own prospects in the year ahead. That was down a couple points on last month, but barely a wobble, he said.
The own activity expectations of firms were reflected in the broader survey.
"It's when own activity expectations go off-piste that the employment and investment posse often follow. We're going at a decent clip with a solid base under us.''
Among the main points of the survey were:
Profit expectations rose from 16 to 20, the fourth monthly rise.
Employment intentions increased from 13 to 18. Sentiment was balanced to whether the unemployment rate would move up or down.
Investment intentions were up from 11 to 15.
Export intentions were slightly lower at 21 from 22.
Residential investment intentions were unchanged at 36 and commercial construction rose from 24 to 29.
Inflation expectations were unchanged at 1.4% and pricing intentions moved from 17 to 22.
Reviewing the wider economy, Mr Bagrie noted migration was strong, house prices were booming and the construction and tourism sectors were going well.
Financial conditions were still supportive, despite the still-high New Zealand dollar.
"There are few sectors we can point to as being on the rocks. New Zealand is in the enviable position of having credibility, competency and stability in the government arena. It's something we can take for granted and is a missing base in many countries around the globe.''
The ANZ composite growth indicator, which combined business and consumer sentiment, was predicting growth in a 2.5% to 3.5% range in the year ahead, he said.
