New Zealand’s ANZ Business Confidence dipped slightly from 58.4 to 57.5 in March. Own Activity Outlook improved from 45.1 to 48.6.
However, the data also brought a clear warning on inflationary pressures. Cost expectations surged from 71.3 to 74.1, the highest level in a year. Pricing intentions climbed from 46.2 to 51.3, marking the strongest since May 2023.
Perhaps more importantly, one-year inflation expectations also ticked up from 2.53% to 2.63%, inching further above the RBNZ’s 2% midpoint target.
ANZ flagged the rising inflation signals as “a little disconcerting,” cautioning that these developments could influence how enthusiastic RBNZ will be about delivering further rate cuts.
A rate cut at the April meeting appears locked in, and a second in May is viewed as likely. However, ANZ noted that the odds of a third cut in July are now “more of a coin toss.”
