New Zealand’s ANZ Business Confidence index dropped from 14.9 to 11.2 in May, signaling a decline in business sentiment. Outlook for own activity also decreased from 14.3 to 11.8.
Cost expectations saw a reduction 76.7 to 72.6, the lowest since February 2021. Wage expectations ticked down slightly from 75.5 to 75.4. Profit expectations fell sharply, from -9.8 to -15.3, and pricing intentions decreased from 46.9 to 41.6, the lowest level since December 2020. Inflation expectations edged down from 3.76% to 3.59%.
According to ANZ, “This month’s Business Outlook survey makes for grim reading, but it also provides confirmation that inflation pressures are waning.”
They indicated that significant progress in reducing non-tradable inflation is anticipated, which, barring any unforeseen inflationary spikes, should restore RBNZ’s confidence. This would potentially allow for future rate cuts, signaling a cautiously optimistic outlook on inflation control and economic stability.
