New Zealand business confidence strengthened sharply in June, while inflation indicators moderated, offering encouraging signs that economic activity is recovering without a renewed acceleration in price pressures. ANZ Business Confidence jumped from 10.0 to 36.6, while firms’ Own Activity Outlook rose from 25.6 to 36.9, pointing to growing optimism about the near-term outlook.
The improvement was accompanied by softer inflation measures across the survey. Inflation expectations eased from 3.63% to 3.36%, firms’ cost expectations fell from 90 to 85, and pricing intentions declined from 56.7 to 50.7, their lowest level since November.
ANZ noted that the pickup in activity was already evident early in the month, before oil prices collapsed, suggesting the recovery reflects improving underlying business conditions rather than a temporary boost from cheaper energy. Likewise, the moderation in inflation indicators was already underway before the sharp fall in oil prices gathered pace.
The survey presents a constructive backdrop ahead of next week’s Reserve Bank of New Zealand policy decision. While ANZ continues to expect a 25 basis point rate hike, it believes policymakers are likely to proceed cautiously thereafter as they assess both the economy’s ability to regain momentum and the persistence of inflation following the earlier oil price shock.
| Indicator | Previous | Latest |
|---|---|---|
| ANZ Business Confidence | 10.0 | 36.6 |
| Own Activity Outlook | 25.6 | 36.9 |
| Inflation Expectations | 3.63% | 3.36% |
| Cost Expectations | 90 | 85 |
| Pricing Intentions | 56.7 | 50.7 |
Full ANZ business confidence release here.
