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New Zealand Business Confidence February 2024

New Zealand: Business sentiment moderates but remains upbeat in February

The ANZ bank business outlook indicator dipped in February, although it remained strongly optimistic. A net 34.7% of firms reported that they expect general business conditions to improve in the year ahead, declining from a net 36.6% of firms expecting better general business conditions in the year ahead in January. As a result, the headline remained firmly above the net-0% threshold that separates optimism from pessimism among businesses.

Wage expectations decreased, as did capacity utilization. However, businesses grew more upbeat with regards to profit expectations and export and investment intentions.

Meanwhile, firms’ outlooks regarding their own activity—a metric which has a stronger correlation to GDP growth—rose to a net 29.5% in February from a net 25.6% in January.

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

“The ANZBO continues to portray a patchy economy, with green shoots in some areas, but ongoing challenges in others. Has the RBNZ done enough to bring inflation back down to target? Certainly this survey doesn’t suggest the economy is rolling over or that inflation has been beaten. We continue to think there’s a high chance that forthcoming data will show more work needs to be done to return inflation to target in an acceptable time frame. As the adage goes, time will tell.”

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