However, it remained a very challenging time to run a business and the uncertainty of the outlook would likely see some hiring and investment decisions put on hold, she said.<\/p>\n
Firms\u2019 expectations of where inflation is headed rose from 3.1% to 3.8%, but \u201cfor the RBNZ [Reserve Bank] was about as benign as they could reasonably hope\u201d, Zollner said.<\/p>\n
\u201cIt\u2019s early days of course, but constrained wage-setting intentions and steady pricing intentions provide a small degree of reassurance in the face of rising cost and inflation expectations.\u201d<\/p>\n
But inflation indicators continued to trend higher, unsurprisingly, with a sharp lift in expected costs and inflation expectations, Zollner said \u2013 though pricing intentions dipped slightly in the month, showing that uncertainty about future inflation was also rising.<\/p>\n
\u201cUncertainty about future inflation makes firms\u2019 decision-making and planning more difficult,\u201d she said.<\/p>\n
Firms\u2019 average numerical expected costs and price changes over the next three months were both rising, the former by considerably more (4.6% versus 2.4%).<\/p>\n
\u201cThat implies a degree of expected margin squeeze similar to 2022,\u201d Zollner said.<\/p>\n
Firms\u2019 own past activity, the best indicator of gross domestic product (GDP) in the survey, was steady in April, with mixed moves in the various sectors.<\/p>\n
Agriculture remained the strongest sector, followed by manufacturing.<\/p>\n
Reported past employment rose, with manufacturing leading the charge by quite some way, Zollner said.<\/p>\n
\u201cThe relative strength in the demand for manufactured goods might reflect people stocking up various inputs to production or other items in anticipation of potential higher prices and\/or reduced availability later.\u201d<\/p>\n
Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.<\/p>\n