New Zealand: Business confidence hits highest reading since March in August
Latest reading: Business confidence rose to 49.7 in August from July’s 47.8. August’s result marked the strongest since March; firms grew more upbeat about exports and investment. The ebbing of global tariff turmoil after the U.S. clarified “reciprocal” tariff rates for its trading partners could have underpinned the rise in sentiment.
However, reported past activity—which has the strongest correlation with GDP—worsened in August, and remains negative for retail, construction and manufacturing.
Panelist insight: ANZ Bank analysts, who compiled the business sentiment survey, said:
“This month’s survey is consistent with the RBNZ’s updated view that the economy needs a little more support to head off downside risks. It’s too early to judge the confidence impacts of this month’s shift in [the Central Bank’s] stance, but our view is that it will shore up the recovery that is now underway. Meanwhile, the pain from previous weakness continues to percolate, showing up this month particularly in the sharp drop in reported employment in the construction sector. The recovery will unfortunately not come soon enough for some.”