New Zealand: Business confidence falls in October
November 9, 2022
The ANZ bank business outlook indicator fell in October. As a consequence, a net 42.7% of firms reported that they expect general business conditions to worsen in the year ahead, deteriorating from a net 36.7% of firms expecting bleaker general business conditions in the year ahead in September. As a result, the headline moved further below the net-0% threshold that separates pessimism from optimism among businesses.
Business grew less downbeat with regards to ease of credit, profit expectations and export and employment intentions.
Meanwhile, firms’ outlooks regarding their own activity—a metric which has a stronger correlation to GDP growth—decreased to a net minus 2.5% in October from a net minus 1.8% in September.
Commenting on the release, Sharon Zollner, chief economist at ANZ, stated:
“It’s a stressful time for businesses. Costs are still rising rapidly, and passing these costs on has become more difficult as customers become more price sensitive. Many firms have been chronically understaffed for a long period and the strain is telling. And economists are out there warning that interest rates are going to keep going higher (and house prices likely lower) until the New Zealand economy goes into recession or something close to it. If the global economy doesn’t side-swipe us first, that is.”
