New Zealand Economic Sentiment September 2022

New Zealand

New Zealand: Business confidence gains further ground in September

October 6, 2022

The ANZ bank business outlook indicator rose again in September. As a consequence, a net 36.7% of firms reported that they expect general business conditions to worsen in the year ahead, improving from a net 47.8% of firms expecting bleaker general business conditions in the year ahead in August. As a result, the headline remained below the net-0% threshold that separates pessimism from optimism among businesses.

Business grew less downbeat with regards to ease of credit, while they turned optimistic regarding investment intentions and commercial construction.

Meanwhile, firms’ outlooks regarding their own activity—a metric which has a stronger correlation to GDP growth—increased to a net minus 1.8% in September from a net minus 4.0% in August.

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

“The New Zealand economy is at a delicate juncture. It’s fair to say that demand has not yet rolled over as feared as the Reserve Bank has raised interest rates. But insofar as the RBNZ can just keep on going until they see the cooling in demand they need to tame inflation, that’s likely to be a temporary reprieve, if not an outright double-edged sword for firms that have considerable debt.”

FocusEconomics Consensus Forecast panelists project fixed investment to increase 4.8% in 2022, which is down 0.1 percentage points from last month’s forecast, and to increase 3.6% in 2023.

Author: Massimo Bassetti, Senior Economist

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