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Pre-quake survey finds business confidence rising

Monday 28th February 2011

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Business confidence rose in February in the National Bank Business Outlook survey but the impact of last week's earthquake in Christchurch on confidence will not be apparent until the next survey.

"For now, all we can do is keep our fingers and toes crossed that the hit to confidence is not too extensive, and that the early signs of improvement we have detected early this year do not get snuffed out," National Bank said.

A net 35% of businesses expect better times for the economy over the coming year, up five points on December.

While a net 37% expect better times for their own business over the year ahead, up two points on the end of last year.

Employment intentions weakened five points with a net 8% of businesses expecting to be hiring staff, down from a net 13% in December.

Profit expectations were unchanged at plus 15 and investment intentions lifted marginally from plus eight to plus nine.

A net 33% of businesses expected export volumes to lift over the coming year, up from plus 24 in December last year.

"We suspect an inflection point for the economy was reached in the first two months of the year. Soft leading indicators are foretelling of a pending robust recovery," the survey's authors said.

The reality check will come with the hard data, which needs to confirm the same.

"The problem here is simple: by the time such confirmation comes, we'll be well and truly into the swing of it."

The survey was carried out prior to last Tuesday's magnitude 6.3 earthquake in Christchurch.



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