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New Zealand Business Confidence October 2023

New Zealand: Business sentiment jumps in October on elections result

The ANZ bank business outlook indicator surged in October, following the result of 14 October elections. A net 23.4% of firms reported that they expect general business conditions to improve in the year ahead, improving from a net 1.5% of firms expecting better general business conditions in the year ahead in September. As a result, the headline moved further above the net-0% threshold that separates optimism from pessimism among businesses.

Businesses grew less downbeat with regards to profit expectations. Moreover, export and investment intentions improved considerably.

Meanwhile, firms’ outlooks regarding their own activity—a metric which has a stronger correlation to GDP growth—jumped to a net 23.1% in October from a net 10.9% in September.

Commenting on the release, Sharon Zollner, chief economist at ANZ, stated:

“It is fair to say that the historical data and experience suggests that people may overestimate the near-term impact of a change in Government on the business cycle, in either direction. […] Before we judge the importance for the economic outlook, particularly given the noise of the election, we’ll see whether the newfound (relative) optimism persists over the next few months.”

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