New Zealand: Business confidence records worst reading since September 2023 in June
Business confidence came in at 6.1 in June, down from May’s 11.2. June’s result marked the weakest since September 2023, and was driven by softer sentiment in services and manufacturing. Reported past activity—which has the strongest correlation with GDP—improved slightly but remained deep in negative territory at -17.9.
Weak reported past activity for Q2 as a whole suggests a soft GDP outturn in the quarter, in line with our panelists’ forecasts for just 0.2% quarter-on-quarter growth.
ANZ Bank analysts, who compiled the business sentiment survey, were even more downbeat:
“The June ANZ Business Outlook survey remained weak in the forward looking activity indicators with a marked decline in reported past activity […]. Construction is experiencing the largest fall in activity versus a year earlier, followed by retail, but every sector except agriculture is reporting weaker activity than a year earlier. While Q1 GDP was (barely) respectable, the signals for Q2 GDP are extremely weak. We have pencilled in a small decline at this early stage.”