ANZ bank’s February survey showed headline confidence falling five points to a net 59 percent optimism level.
Photo: RNZ / Cole Eastham-Farrelly
- ANZ headline business confidence down 5 points to net 59 percent optimism
- Firms’ own outlook edges higher to 52.6 pct, manufacturing most bullish
- ANZ puts the stumble down to the rise in wholesale interest rates
- Profit, exports, investment indicators steady or a touch lower
- ANZ warns price/cost indicators mixed, may test RBNZ confidence inflation headed lower
The rise in business confidence has taken a breather amid rising wholesale interest rates, but remains broadly upbeat.
The ANZ bank’s February survey showed headline confidence falling five points to a net 59 percent optimism level, but the measure of firms’ own business performance edged higher.
Chief economist Sharon Zollner said the survey overall was solid and the dip might only be temporary.
“The sharp turn in interest rates seen from late-November until mid-February has had an impact on the Business Outlook survey – expected credit conditions and profitability have taken a hit, and past activity has also seen a bit of a wobble.”
She said the Reserve Bank’s recent comments about policy seems to have helped ease rates, which may calm nerves in the next survey.
However, Zollner said there were a few inflation signs that needed to be watched, with inflation expectations the highest since mid-2024.
“The net percent of firms expecting to increase their prices eased very slightly but is still trending in the opposite direction to our and the RBNZ’s inflation forecasts.”
“The net percent of firms expecting higher costs also remains elevated.”
Zollner said the RBNZ has frequently expressed confidence that inflation was headed back into the 1-to-3 percent target band in the near term, but might yet be surprised.
She warns that inflation expectations and pressures are rising which may test Reserve Bank confidence that inflation will fall back into its target band soon.
Manufacturing was the most upbeat at the headline level, but agriculture related firms had the highest readings for export, profit and investment expectations.
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