WELLINGTON: New Zealand business confidence hit a 14-year high in the third quarter due to a broad increase in trading activity, a private think tank said on Tuesday, while more firms are expecting official interest rates to rise next year.
A net 38 percent of firms surveyed expected general business conditions to improve, scaling its highest since March 1999 and rising from 32 percent in the previous quarter, the New Zealand Institute of Economic Research said in its quarterly survey of business opinion (QSBO).
On a seasonally adjusted basis, a net 32 percent of firms expected general business conditions to pick up, its highest since March 2010 and up from a downwardly revised 30 percent optimism in the previous survey.
The rise in optimism was driven by a rebound in activity, which translated into more jobs and higher profits. Activity is starting to pick up outside the Canterbury region, which has been leading growth due to earthquake reconstruction projects, the NZIER said.
The poll's measure of capacity utilisation edged up to 91.4 percent from 91.3 percent in the second quarter because of high capacity pressures in the Canterbury region.
A net 67 percent of respondents from the financial markets said they expected interest rates to rise from a record low 2.5 percent over the next year, jumping from 30 percent in the previous quarter.
More firms anticipated prices to rise in the coming months even as pressures outside the Canterbury rebuild remain subdued at the moment.
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