ANZ's business outlook survey shows net 39% of businesses expect conditions to be better in the year ahead

New Zealand businesses are feeling much happier about their lot.

Business confidence has surged to a 19-month high, according to the ANZ Bank's latest monthly survey of business opinion.

A net 39 percent of businesses expect general business conditions to get better over the year ahead, while a net 38% are optimistic about their own prospects for 2013.

ANZ chief economist said the reason for this sunny mood could be attributed to  three developments.

"It’s summer - All that vitamin D is working its magic.

"The global scene continues to improve.

"There are better local nuances. Property prices keep rising. Building consents are up. It’s far from across the board: employment trends remain weak. However, we’re seeing more ticks than crosses."

The net 38% of firms optimistic about their own business’s prospects, is up from a net 31% in December. Manufacturers are particularly upbeat, with a net 48.7% of them expecting increased business activity in the next year.

"That’s well above average and points to the potential for solid growth. Likewise, profitability expectations, employment intentions and investment intentions are on the up," Bagrie said.

However, export intentions continued to languish with a meagre net 13% expecting a rise, against a historical average of 32%.

"The main culprit is obvious: a New Zealand dollar that continues to be out of line with local fundamentals," Bagrie said.

Expectations of price increases increased, but their levels "remain tame".

"We’ve been here before," Bagrie said.

"We’ve seen lifts in business sentiment in late 2009 and into 2010, mid 2011 and early 2012. Reality – growth-wise – has failed to match expectations. This doesn’t mean we ignore signals from business sentiment: they remain key components of our forecasting arsenal.

"What looks different this time around is that we’ve seen a modest lift in consumer confidence as well."

Bagrie said this fact gave credence to the argument that rises in business sentiment may be more substance than noise this time around.

"However, the reality check here is the lack of job creation, with cost containment still front and centre for businesses."

The ANZ's combined composite growth indicator – combining indicators from both the bank's Business Outlook survey and its Consumer Confidence survey – is flagging 2.8 percent growth by the middle of  the year.

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It's only twenty six thousand million....
"Child support debt has ballooned to more than $2.6 billion in New Zealand and shows no sign of abating"press

I cannot understand how so much is owed.
My sons contributions are taken automatically from his pay and the more he earns the more he pays.
How is it that some don't pay at all .Ipresume they get either paid or get a benefit.
My son must be one of the unlucky ones.

Most of that figure is penalties and interest, which they are able to wipe, in order to collect the principle (from experience).

ANZ, Telecome, Contact Energy, Solid Energy etc are cutting jobs.
NZD is high.
ChCh rebuild is slowly moving nowhere.
Lots of other regions in the North Island is going to be declared drought by MPI.
Dairy price is mediocre and lamb price is at a bottom.
Unemployment rate is tracking upwards.
Trade deficit continues to widen in Jan.
School teachers are complaining Novopay.
A guy got eaten by a big Jaw.
I wonder what force has push up the confident level.

Interestingly enough sales of Prozac and prescription amphetamines have reached 19 month highs coinciding with the sunniest summer in many a year for those not on the meds.
A good splash for three to four weeks ought to knock the gloss off the ol confidence.

DH must have a bucket on next to his desk then...
"The global scene continues to improve."
Sure it is...

""It’s summer - All that vitamin D is working its magic."
Sure is in the USA, worst drought on record....some magic.
"Nearly five months after expanding to cover the greatest area on record, the devastating drought of 2012 continues to spread woe across the central and western U.S. And, according to climate researchers, severely dry conditions will persist throughout the spring and summer."

Happy Days are here again .....There is nothing like increases in the values of our houses to make us feel confident and bullish