Construction, tourism and a rebounding dairy industry drove an increase in optimism among New Zealand businesses in the quarter ending September, an independent economic think-tank said Tuesday.
The Quarterly Survey of Business Opinion from the New Zealand Institute of Economic Research (NZIER) showed a strengthening of business confidence over the quarter, with 26 percent of firms expecting better economic conditions in coming months.
The improvement in confidence was obvious in dairy-intensive regions with recent increases in global dairy prices reducing risks to the sector, NZIER senior economist Christina Leung said in a statement. Confidence was strongest in tourism-intensive regions, she said.
"Firms are also expecting a strong lift in demand in their own business, with a net 32 percent expecting an improvement in own trading activity over the next quarter - the highest level since mid-2014," said Leung.
Confidence in the building sector was also strong, boosted by a pipeline of residential and commercial construction work. "Rapid population growth has boosted demand for housing and new office buildings, and firms expect a further ramp-up in building activity over the next few years," said Leung.
However, hiring over the past quarter had eased, in contrast to the surge in hiring intentions for the next quarter. "A net 27 percent of firms are looking to increase headcount in the next quarter - the highest level for 43 years," said Leung.
Firms reported increased difficulty in finding labor, and this might have limited the extent to which firms could increase headcount over the past quarter. "The difficulty in finding labor is particularly acute for skilled labor, with shortages at levels not seen since December 2007," she said.
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