New Zealand’s ANZ Business Confidence index eased from 64.1 to 59.2 in February. However, the Own Activity Outlook edged higher from 51.6 to 52.6, suggesting firms remain broadly optimistic about their near-term operating conditions.
Beneath the surface, inflation pressures appear to be building again. The net percentage of firms expecting to raise prices over the next three months fell 4 points to 53%, partially reversing last month’s surge. Yet cost expectations remain elevated, with 79% of firms anticipating higher costs — the highest level since July 2023.
More notably, one-year inflation expectations rose from 2.77% to 2.93%, their highest level since July 2024. Wage expectations climbed above 3% for the first time since April 2024.
ANZ noted that pricing intentions are not consistent with widespread expectations of a steady decline in headline inflation this year. Although inflation is projected to return to the target band in Q1 and the RBNZ has expressed confidence in the disinflation path, the survey highlights ongoing upside risks.
