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New Zealand Economic Sentiment April 2022

New Zealand: Business confidence deeply entrenched in pessimistic terrain in April

The ANZ bank business outlook indicator dipped in April. As a consequence, a net 42.0% of firms reported that they expect general business conditions to worsen in the year ahead, deteriorating slightly from a net 41.9% of firms expecting bleaker general business conditions in the year ahead in March. As a result, the headline reading remained entrenched below the net-0% threshold that separates optimism from pessimism among businesses.

Business grew more downbeat with regards to investment intentions and profit expectations, while they turned less downbeat with regards to ease of credit and export intentions. Moreover, their inflation expectations remained sky high.

Meanwhile, firms’ outlooks regarding their own activity—a metric which has a stronger correlation to GDP growth—rose to a net 8.0% in April from a net 3.3% in March.

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

“With plenty of wage and other cost inflation in the pipeline, it’ll be some time before the RBNZ can conclude that they’re getting ahead of the inflation game.”

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