New Zealand: Business confidence weakens in March
March 11, 2021
The ANZ bank business outlook indicator slumped in March. As a consequence, a net 0.0% of firms reported that they expect general business conditions to improve in the year ahead, from a net 7.0% of firms reporting that they expected general business conditions to worsen in the year ahead in February. Therefore, the headline reading landed on the net-0% threshold that separates pessimism from optimism among businesses.
March’s result reflected weaker investment and employment intentions as well as expectations of less favorable credit conditions ahead.
Meanwhile, firms’ outlooks regarding their own activity—a metric which has a stronger correlation to GDP growth—dropped to a net 17.4% in March from a net 21.3% in February, which had marked the strongest reading since March 2018.
Commenting on the release, Sharon Zollner, ANZ chief economist, stated:
“The economy is entering a phase in which gains will be harder won. The tourism sector pain is becoming more palpable, and booming sectors such as construction are running up against constraints in terms of the availability of labour and, increasingly, imported materials.”