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New Zealand Economic Sentiment March 2022

New Zealand: Business confidence recovers some lost ground in March

The ANZ bank business outlook indicator increased in March. As a consequence, a net 41.9% of firms reported that they expect general business conditions to worsen in the year ahead, improving from a net 51.8% of firms expecting bleaker general business conditions in the year ahead in February. As a result, the headline reading removed entrenched below the net-0% threshold that separates optimism from pessimism among businesses.

Business turned less downbeat with regards to ease of credit and profit expectations as well as somewhat more upbeat with regards to export and investment intentions and capacity utilization. However, their inflation expectations hit a new fresh record high.

Meanwhile, firms’ outlooks regarding their own activity—a metric which has a stronger correlation to GDP growth—rose to a net plus 3.3% in March from a net minus 2.2% in February.

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

“The March ANZ Business Outlook survey saw most activity indicators bounce back a little, perhaps as the worst fears about the impact of Omicron waned. But it was nothing spectacular. And inflation pressures continued to lift, with the commodity price impact of Russia’s invasion of Ukraine giving pressures fresh impetus.”

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