RTTNews - New Zealand's business confidence rose to its highest level in more than seven years, the latest survey by the National Bank revealed Wednesday.
The survey showed that a net 18.7% of respondents expect the general business conditions to improve over the next 12 months compared to only 5.5% in June.
Firms' own activity expectations also increased, with a net 12.6% of respondents expecting an improvement in their own business compared to a net 8.3% in June.
The bank said the level of business confidence exceeded that of firms' activity expectations for the first time in a decade.
Improved confidence is an important step towards recovery, and we appear to be making that first step. But of course the feel good factor is not sufficient in itself and at some stage the substance check will be provided by what firms see in their own business, the National Bank noted.
At the same time, other key indicators including expectations regarding investment, employment, profit showed improvements, although they still remained weak.
A net 2.3% expect investments to fall over the next one year compared to 5.6% in the preceding month, while a net 13.8% expect profits to fall versus 24.2% who did so a month earlier. A net 6.8% anticipate shedding staff, which is an improvement over the 16.6% in the previous month. A net 74.3% of respondents expect the unemployment rate to continue rising, smaller than the 75.4% expecting to do so in the previous month.
Pricing intentions by firms picked up, with a net 12.9% expecting to raise prices versus 8.5% last month. Export expectations also improved, with a net 14.2% anticipating a rise in exports versus a net 8.3% in June. This came despite a stronger New Zealand dollar, that was hurting exports.
However, inflation expectations in 12 months time increased slightly to 2.6% from 2.5% in June.
With respect to the ease of getting credit, there was a slight improvement from the previous month, though a net 15% of respondents still expect credit to be more difficult to obtain over the coming year.
Overall, this month's survey suggests that the light at the end of the recession tunnel may be just around the corner, the National Bank said. The bank pointed out that the outlook was improving, but said we are still cautious about the outlook, for we have not really seen the full impact of rising unemployment and reduced rural incomes yet.
Meanwhile, the slump in the housing market continued in June. The seasonally adjusted number of new housing units, including apartments, was down 9.5% month-on-month, after a 3% rise in May.
For the year ended June 2009, consents were issued for 14,175 new housing units, including apartments. This was the lowest annual number for a June year since the series began in April 1965, the statistical office said.
In order to correct the delays currently being present in issuing housing consents, the Building and Construction Minister Maurice Williamson said Wednesday that a bill was passed that would speed up the building consents process and reduce costs.
The legislation would help reduce duplication and fast-track the consent process for group home builders, who build homes on sites across the country using the same, or similar designs, Williamson said.
Moreover, the bill defines a new streamlined process to manage minor variations to building plans after the consent is issued, saving time for applicants and councils. And it makes project information memorandums, known as PIMs, voluntary, the minister added.
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