Wellington, New Zealand (4E) – Confidence among New Zealand business continued to increase in the third quarter, rising to its highest level in more than three years as the nation’s economy shows further signs of strengthening.
The New Zealand Institute of Economic Research (NZIER) index of confidence jumped to 38 from 32 in the previous three months, and the highest since the first quarter of 1999. The data is based on a survey of around 900 businesses.
On a seasonally adjusted basis, the gauge climbed to 32 from 30, the biggest since the first quarter of 2010, according to the NZIER report released Tuesday in Wellington.
Shamubeel Eaqub, principal economist at NZIER, said that activity is bouncing back, businesses are more confident, and this is being gradually translated into higher profits and more hiring.
Economic growth declined to 0.2 percent in the second quarter, compared with 0.4 percent in the previous three months as a drought hurt farm output. The country’s central bank has said it expects to increase interest rates in 2014 as the annual pace of growth accelerates to 3.5 percent, the fastest since 2007, boosted by residential construction, consumer spending, and post-earthquake rebuilding efforts in Christchurch.
Firms’ capacity utilization advanced slightly to 91.4 percent from 91.3 percent in the second quarter, according to the institute.
Cost pressures also increased slightly as 24 percent of total respondents expect selling prices to rise in the upcoming quarter, from 22 percent in the previous survey.