RTTNews - Confidence among firms in New Zealand improved in June, the latest survey from the National Bank showed Tuesday.

A net 5.5% of firms now expect business conditions to improve over the next 12 months compared to only 1.9% in May. Firms' own activity expectations continued to increase, with a net 8.3% of firms expecting the activity to improve over the next one year compared to a net 3.8% a month earlier.

The construction sector was the most confident in June, with a net 46% of firms expecting better times ahead, which is the highest reading since 1999. However, the confidence dropped in the agricultural sector.

Meanwhile, profit, employment and investment intentions of firms continued to remain weak. Export intentions picked up, while the pricing intentions continued to fall. There is simply no pricing power left in the economy and we may well see inflation fall below the bottom of the 1 to 3 percent target band, the National Bank said.

The report said firms expect credit to be more difficult to get over the coming year, with the services sector perceiving access to credit as 'tight'. However, the construction sector expects access to credit to improve over the year.

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