Business confidence bounces back into positive territory – ANZ

Businesses are sharing in the Christmas cheer as confidence amongst firms jumps to levels last seen in 2017.

Generic exteriors of ANZ office

Photo: RNZ / Nate McKinnon

ANZ Bank’s latest business index shows headline sentiment rose 16 points over the past month to a net 9.4 percent, the highest reading in three years.

The more closely followed measure of how firms felt about their own future lifted by 13 points, with a net 21.7 percent of firms expecting business to improve over the next 12 months.

“The New Zealand economy is showing impressive resilience. After a 14 percent bounce-back in the September quarter, the economy is the same size it was pre-Covid,” ANZ chief economist Sharon Zollner said.

“It’s not the same shape though. Behind the numbers lie some real stresses and strains, in both overheated sectors like construction, and chilled ones like tourism.”

All the major sub indexes the ANZ bank measures, such as employment intentions and profit expectations lifted over the month.

The bank did a include a question about freight disruptions in this survey because of the many anecdotes and media reports of businesses struggling to get supplies in and out of the country.

“Manufacturers and retailers are most impacted by supply issues from freight disruptions, while manufacturers report the most difficulty getting goods to customers,” Zollner said.

“Inward supply disruptions are negative for growth, but positive for inflation, because they increase costs. It’s the kind of inflation central banks ‘look through’ as far as possible, but it’s inflation nonetheless, and if it impacts inflation expectations and pricing intentions persistently, the RBNZ will have to take note.”

The biggest challenge firms said they faced over the past three months was finding skilled labour.

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