NZ: Business confidence eased further in April - ANZ

Sharon Zollner, Chief Economist at ANZ, notes that New Zealand’s headline business confidence eased further in April and a net 23% of businesses are pessimistic about the year ahead, down 3 points from March.

Key Quotes

“All sectors are in the red, with services the least pessimistic and agriculture the most. Agriculture did manage a small gain on March, but construction plummeted to its lowest level since 2008. Firms’ views of their own activity (which has the stronger correlation with GDP growth), eased from +22 to +18. Manufacturing and agriculture lifted; construction fell a startling 38 points – excluding this sector the aggregate eased only 1 point.”

“The survey was a mixed bag this month, consistent with an economy pushing its way through capacity constraints and some residual policy uncertainty but with some solid support from record-high terms of trade.

• A net 7% of firms are expecting to lift investment, reversing March’s lift.
• Employment intentions eased 1 point to +9%.
• Profit expectations reversed March’s lift, back from +6 to -1%.
• Export intentions remained solid at +23%, down 1 point.
• A net 26% of businesses expect it to be tougher to get credit, an improvement of 2 points.
• Firms’ pricing intentions eased from +29% to +22%, with retail sector pricing intentions dropping 15 points to +6%, their lowest since 2004. Inflation expectations were again unchanged at 2.1%.
• Residential construction intentions dropped sharply from +33% to +9%. Commercial construction intentions eased from +9.5% to +5%.”