In the preliminary read, New Zealand ANZ business confidence dropped to -0.4 in June, down from May’s 1.8. Own activity outlook rose from 27.1 to 29.1. Looking at some more details, export intentions rose from 12.2 to 13.9. Investment intentions rose from 18.9 to 25.3. Employment intentions dropped from 20.5 to 19.6. Pricing intentions rose from 57.4 to 62.8. Inflation expectations rose further from 2.22 to 2.33.
ANZ said: “Shipping disruptions, rising global commodity prices, the higher minimum wage, labour shortages due to both the closed border and uneven sector growth are creating a perfect storm for the supply side of the economy at the same time as demand is holding up much more than firms (or economists!) had anticipated.
“Headline inflation is set to jump over the next six months as a result, but it’s best to focus on wage growth and inflation expectations for clues regarding when the Reserve Bank might conclude they can no longer look through inflation pressure and simply wait for temporary pressures to subside, necessitating a higher OCR.”
