New Zealand: Business confidence weakens further in December
The ANZ bank business outlook indicator dropped in December. As a consequence, a net 23.2% of firms reported that they expect general business conditions to worsen in the year ahead, deteriorating from a net 16.4% of firms expecting bleaker general business conditions in the year ahead in November. As a result, the headline reading moved further below the net-0% threshold that separates optimism from pessimism among businesses.
Business turned more downbeat with regards to ease of credit expectations, export and investment intentions and capacity utilization. Moreover, their profit expectations worsened.
Meanwhile, firms’ outlooks regarding their own activity—a metric which has a stronger correlation to GDP growth—fell to a net 11.8% in December from a net 15.0% in November.
Commenting on the release, Sharon Zollner, chief economist at ANZ, stated:
“It’s been a long year, particularly for those of us in Auckland. And unfortunately the cloud of uncertainty that hangs over 2022 is not a great deal smaller, nor fluffier. But we’ve come through the pandemic thus far in much better shape than many, with a record-high employment rate and businesses in remarkably good heart, given how difficult it is to plan very far ahead in this kind of environment.”