New Zealand: Business confidence moves further into pessimistic territory in July
The ANZ bank business outlook indicator fell by 6.2 points in July, with a net 44.3% of firms reporting that they expect general business conditions to deteriorate this year. The headline reading therefore moved further below the net-0% threshold that separates pessimism from optimism among businesses. July’s result reflected falling profit expectations, growing concerns over tighter credit conditions, and falling employment intentions.
Meanwhile, firms’ positive outlook regarding their own activity—a metric which has a stronger correlation to GDP growth—declined to a net 5.0% in July, after reporting a net 8.0% in June. Notably, the activity outlook for the construction and retail sectors deteriorated notably from the previous month, while the outlook for the manufacturing, agriculture and services sector improved.