Business confidence hits a decade high, says National Bank survey

A net of 50 % of respondents to the February survey expect better times ahead, this is up 11 percentage points from December 2009, the highest business confidence level since April 1999. Manufacturing, agriculture, construction and services were all higher across the board and export intentions reflect better volumes expectations in the year ahead, by 31%, this National Bank Business Outlook survey showed. However, retailing bucked the trend falling 14 points, with a net 7 per cent of retailers expecting to cut employment and 6 percent to be investing less. Investment intentions was the other area with survey results not so positive, with a net 8 percent expecting to be investing more over the coming year, down 2 percentage points on the last December reading. "The failure to follow the reads from employment, profits and activity expectations suggest there are deeper forces keeping firms in a holding pattern," National Bank said. Underlying improvement in business confidence is evident from the survey but the National Bank still notes that global issues, unemployment moving up and the housing market "hitting a wall", all factors inhibiting business growth. The National Bank Business Outlook surveys are watched by the Reserve Bank and others as an leading indicator of economic growth.