headline confidence dropped<\/a> from a net 32.5 percent in March to minus 10.6 percent in April.<\/p>\nChief economist Sharon Zollner said buried in the data was the detail that responses were weaker in late March than early April, suggesting businesses may be adapting to the shock – but it was still a “precipitous fall either way.”<\/p>\n
She said the result confirms businesses have turned decidedly more cautious about the economic outlook.<\/p>\n
Forward-looking indicators weakened broadly, with firms’ expected own activity – a key measure of future demand – falling from 39.3 to 19.6, while employment, investment and export intentions all declined.<\/p>\n
Profit expectations also swung into negative territory, highlighting the strain firms are under as costs rise while demand softens.<\/p>\n
By contrast, reported activity over the past year was relatively steady at a net 16.9 percent, suggesting the hit to sentiment has yet to fully translate into weaker output.<\/p>\n
However, ANZ noted the environment remains challenging, with uncertainty likely to weigh on hiring and investment decisions.<\/p>\n
“It’s a response to uncertainty to maybe defer risky decisions – and investing or employing someone are both risky decisions to make,” Zollner said.<\/p>\n
She singled out the construction sector, where higher interest rates, rising costs and potential material shortages had left it facing a “perfect storm.”<\/p>\n
“Some consents might be quietly going on the shelf until this uncertainty is resolved.”<\/p>\n
At the same time, inflation pressures picked up again in the survey.<\/p>\n
Inflation expectations for the year ahead rose from 3.1 percent to 3.8 percent, their highest level since early 2024, while cost expectations surged to their highest levels since 2023.<\/p>\n
ANZ described the environment as a significant cost shock for businesses, but firms appear reluctant – or unable – to fully pass those higher costs on, increasing pressure on margins.<\/p>\n
Pricing intentions were little changed during the month, and expected price increases over the next three months remained broadly steady, while wage expectations eased slightly.<\/p>\n
Zollner said that combination would offer some reassurance to the Reserve Bank that higher inflation may not become entrenched – although she acknowledged it was “bad news for workers, who are facing cost pressures of their own as fuel prices rise.”<\/p>\n
Zollner said the survey had not altered ANZ’s forecast for the Reserve Bank to begin raising interest rates in July, even as firms and households continue to face rising costs.<\/p>\n
Sign up for Ng\u0101 Pitopito K\u014drero<\/a>, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.<\/p>\n","protected":false},"excerpt":{"rendered":"(File photo) Photo: RNZ \/ Quin Tauetau Business confidence has slumped into negative territory, as firms face weaker…\n","protected":false},"author":2,"featured_media":337013,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[48,138,47,219,111,43,139,69,49,46,44,45],"class_list":["post-404916","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-audio","tag-business","tag-current-affairs","tag-economy","tag-new-zealand","tag-news","tag-newzealand","tag-nz","tag-podcasts","tag-public-radio","tag-radio-new-zealand","tag-rnz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/404916","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=404916"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/404916\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/337013"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=404916"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=404916"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=404916"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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