A net 21% of business owners were optimistic about the year ahead, according to the ANZ Business Outlook. The survey was undertaken before the November 14 Kaikoura earthquakes. The four-point decline was a small move and the confidence reading was still the third-highest of the year, he said.
A net 38% of businesses expected better times for their own business, 10% above the long-run average, with positivity shown across all five major sectors. Activity expectations within the construction sector surged to the highest reading since May 2014 and agriculture rose to a 20-month high.
Investment intentions were unchanged at 19%, well above the historical average of 13%. Employment intentions remained strong at 25%, led by construction and backed up by agriculture. More firms expected the unemployment rate to fall.
Profit expectations were "basking" at 28%.
Export intentions barely budged, moving from 25% to 23%. Agriculture led with 36%, the highest result in 10 years.
Firms’ pricing intentions rose from 18% to 21% but were still low, Mr Bagrie said.
Inflation expectations rose from 1.4% to 1.5% and for the first time in nearly two years, a majority of firms expected interest rates to rise.
The survey results had a good undercurrent. Activity expectations were positive across all regions but one. The same applied for employment.
"Red numbers are few and far between. Agriculture firms are coming off extreme lows, responding positively to recent commodity price lifts."
However, firms across all sectors were reporting it was getting more difficult to get credit, something Mr Bagrie supported.
New Zealand’s history was littered with boom-bust cycles and credit sat at the centre of such dynamics.
