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New Zealand Firms More Confident About Sales, Profit

Nov. 29 (Bloomberg) -- New Zealand business confidence rose for a third month in November on expectations for more hiring and investment in the next year and greater optimism about the nation’s economic recovery, a private survey showed.

A net 35.3 percent of companies expect their own sales and profits will increase over the next 12 months, up from 30.5 percent in October, according to a survey by ANZ National Bank Ltd. released in Wellington today. The net figure subtracts the number of pessimists from the number of optimists.

Rising confidence, falling unemployment and strengthening demand for exports may help growth accelerate next year. The confidence gauge has rebounded from a 12-month low in August, indicating little urgency for the central bank to raise interest rates before the second quarter of 2011, ANZ National Chief Economist Cameron Bagrie said.

“While we are encouraged by the lift in sentiment this month, challenges remain,” Bagrie said in an e-mailed statement. Central bank Governor Alan Bollard “has scope to support the economy via accommodating monetary policy and continued low interest for a while yet,” he said.

Bollard kept the official cash rate unchanged at 3 percent for a second month in October. Previously, ANZ National expected a rate rise in March.

A net 6.6 percent of companies expect to increase investment in the next year, the survey showed. A net 12 percent intend to hire more workers, and 15 percent expect higher profits.

The measure of overall confidence in the economy rose for a second month, with 33.2 percent of the 482 companies surveyed expecting the economy to improve over the next year, up from 23.7 percent in October.

Earlier, a government report showed exports rose to a four-month high in October, buoyed by record sales of milk powder, butter and cheese. New Zealand’s jobless rate fell more than economists projected in the third quarter, dropping to 6.4 percent, according to a statistics agency report on Nov. 4.

To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net

To contact the editor responsible for this story: Chris Anstey at canstey@bloomberg.net

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