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New Zealand Business Confidence Near 20-Year High

New Zealand business confidence strengthened to highest since 1994 as the economic recovery broadened across regions, the Quarterly Survey of Business Opinion from New Zealand Institute of Economic Research showed Tuesday.

In the fourth quarter of 2013, a net 52 percent of firms forecast business conditions to improve over the coming six months, up from 33 percent in September. The score was the highest since the second quarter of 1994.

Domestic trading activity also improved with net 15 percent of firms reporting increasing activity, up from 12 percent in September. This was the strongest score since March 2005.

Further, reported hiring rose to the highest level since December 2006, and firms expect to hire more staff at the start of 2014. This suggests an improved outlook for jobs and wages.

Although price pressures remain subdued in the economy, firms intend to raise their prices in coming quarters due to increasing capacity pressures and strengthening economic growth.

The survey showed that more financial services sector firms expect interest rates to rise, which was consistent with economists' expectations in December 2013.

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