New Zealand Economic Sentiment October 2022

New Zealand

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.”

FocusEconomics Consensus Forecast panelists project fixed investment to increase 1.0% in 2022, which is unchanged from last month’s forecast, and to increase 1.9% in 2023.

Author: Massimo Bassetti, Senior Economist

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New Zealand Economic Sentiment Chart

New Zealand Business Confidence October 2022

Note: Percentage of respondents expecting improvement in general business conditions minus percentage expecting deterioration. An index number above 0 indicates that optimists outnumber pessimists. The survey is not conducted in January.
Source: ANZ Bank Business Outlook.

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