Business confidence took a hit over the last month with ANZ\u2019s latest business outlook warning of a \u201cwall of worry\u201d as confidence fell in April.<\/p>\n
The net percentage of those expecting\/reporting improvement and those expecting\/reporting deterioration went from 32.5 in March, to -10.6 in April. While it paints a bleak picture, the average in late-March was even lower at -22.5.<\/p>\n
Agriculture was at -48.6 and services at 18.6, while confidence in construction was at 19.6.<\/p>\n
On inflation, expectations rose to 3.8% in April, from 3.1%.<\/p>\n
Indicators trended higher \u201cunsurprisingly, with a sharp lift in expected costs and inflation expectations, though pricing intentions dipped slightly in the month\u201d, the report said.\u00a0<\/p>\n
Uncertainty around inflation was rising, which was making decision-making and planning harder for firms.<\/p>\n
Price expectations from the three months to went just to 2.41% from 2.37%, while cost expectations rose from 2.99% to 4.57%.<\/p>\n
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ANZ Business Outlook for April.<\/p>\n
ANZ\u2019s chief economist Sharon Zollner\u2019s take was that while businesses were concerned about the outlook in the face of a significant cost shock, and \u201calthough the charts are ugly, many activity indicators (both forward and backward-looking) were actually higher this month than in the late-month responses received last month.\u201d<\/p>\n
Zollner said this suggested some of the initial confidence shock had dissipated.<\/p>\n
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ANZBO own activity and past activity.<\/p>\n
Activity compared to a year ago was at 16.9, slightly down on March\u2019s 17.5. Agriculture was at 34.3, Manufacturing was at 31.2, while the construction sector was at -2.2.<\/p>\n
There was a broad-based fall in expected own activity, falling from 39.3 to down to 19.6.<\/p>\n
The survey found manufacturing was \u201cleading the charge by quite some way\u201d when it came to the rise in reported past employment at 19, while construction was at -9.<\/p>\n
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Cost expectations and pricing intentions for April – ANZBO<\/p>\n
Zollner said it remained a very challenging time to run a business, and the \u201cuncertainty of the outlook will itself likely see some hiring and investment decisions put on ice until the outlook becomes clearer\u201d.<\/p>\n
\u201cOverall, the inflation news in the survey for the RBNZ was about as benign as they could reasonably hope. It\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 expectation.\u201d<\/p>\n