South Island leads national recovery

Fred Ohlsson
Fred Ohlsson
A swell of optimism from the South Island is expected to drive record business activity throughout New Zealand this year, the ANZ's quarterly Business Micro Scope survey of small firms says.

Retailing, agriculture and manufacturing are leading a lift in optimism which has seen firms' expectations of their own activity, hiring and profitability for the coming year soar to new highs.

ANZ retail and business banking managing director Fred Ohlsson said rising confidence was sweeping across New Zealand, further boosting the outlook for businesses and the economy this year.

Construction and agriculture were caught in the tailwind of the Canterbury rebuild and the increasing commodity prices.

''But optimism is at or near historic highs across all major sectors, paving the way for a broad-based uplift in business activity, employment and economic growth.''

Those factors had come together to create a ''sweet spot'' for the South Island, with optimism in Canterbury spilling over to the rest of the island whose record-high optimism now topped that of Canterbury itself, he said.

Although not quite at the same levels, business confidence in Auckland also entered the new year at a new high.

Highlights from the survey included:

Confidence at its highest since comparable data was first collected in 1999, with record numbers of firms expecting to increase activity, hiring and profitability in 2014.

A net 45% of firms expected to lift business activity in the coming year, double the long-term average. A net 17% planned to take on more staff and 29% expected profits to rise.

Confidence in Canterbury (up from 21% to 27%) was spilling into the rest of the South Island (up from 21% to 30%) and now led the nation.

Services was the most upbeat sector at 25%, retailing recorded the largest lift in confidence followed by agriculture and manufacturing.

Agriculture was the top sector for profit expectations for the first time in two years.

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