New Zealand: Business sentiment virtually unchanged in March
The ANZ bank business outlook indicator dipped in March. As a consequence, a net 43.4% of firms reported that they expect general business conditions to worsen in the year ahead, down from a net 43.3% of firms expecting bleaker general business conditions in the year ahead in February. As a result, the headline remained entrenched below the net-0% threshold that separates pessimism from optimism among businesses.
Business grew more downbeat with regards to export, investment and employment intentions.
Meanwhile, firms’ outlooks regarding their own activity—a metric which has a stronger correlation to GDP growth—rose to a net minus 8.5% in March from a net minus 9.2% in February.
Commenting on the release, Sharon Zollner, chief economist at ANZ, stated:
“Firms are wary but hanging in there. So far, though it’s early days, you’d have to say things do look like a soft landing – activity indicators are subdued but off the floor, labour market tightness is starting to shift, and inflation and cost indicators are very gradually easing. That’s not to say it’s an easy environment – expected profitability is under pressure as firms navigate still-high cost inflation and uncertain future demand. The winter could expose a few more rocks as the wave of tourists depart. But for now, the slowdown is looking broadly in line with the Reserve Bank’s intentions.”