New Zealand: Business sentiment falls but remains upbeat in April
The ANZ bank business outlook indicator declined in April, although it remained strongly optimistic. A net 14.9% of firms reported that they expect general business conditions to improve in the year ahead, declining from a net 22.9% of firms expecting better general business conditions in the year ahead in March. That said, the headline remained firmly above the net-0% threshold that separates optimism from pessimism among businesses.
Businesses grew less upbeat with regards to export intentions, turned pessimistic on investment intentions and grew more pessimistic on profit expectations.
Meanwhile, firms’ outlook regarding their own activity—a metric which has a stronger correlation to GDP growth—decreased to a net 14.3% in April from a net 22.5% in March.
Commenting on the outlook, Sharon Zollner, chief economist at ANZ, stated:
“As long as the demand side of the economy remains constrained, and that’s certainly written all over this survey, the RBNZ can very reasonably hope that cost-push inflation pressures can wash through with little in the way of second-round effects. But it is certainly a reminder that the path back to the target inflation midpoint is unlikely to be a smooth one.”