New Zealand businesses are at their most confident for the first time in two decades, spurred on by economic activity accelerating during the second half of 2013.
Figures released by the New Zealand Institute of Economic Research (NZIER) this morning claims strong growth across Kiwi markets is likely as firms boost investment and employment plans.
“Businesses are the most optimistic they’ve been for 20 years and economic activity is strong,” says Shamubeel Eaqub, Principal Economist, NZIER.
“Optimism and activity are being realised into better profits, higher investment and more jobs.”
In December 2013, businesses were the most optimistic since June 1994 (52% from 33% in September), while domestic trading activity strengthened to the highest level since March 2005 (net 15% of firms reported increasing activity, up from 12% in September).
Reported hiring rose to the highest level since December 2006, and firms expect to hire more staff at the start of 2014, suggesting an improved outlook for jobs and wages.
Recovery spreading across regions and industries
Eaqub also believes the recovery is broadening across regions, adding that "until recently much of the recovery was concentrated in Canterbury.
“This has now broadened to most regions across New Zealand, which points towards a more sustainable and stable recovery.
“Price increases are currently subdued. However, firms intend to raise prices in coming quarters due to increasing capacity pressures and strengthening economic growth.
“Capacity constraints are most pronounced in Canterbury, but are starting to emerge in other regions too.”