Business confidence has largely held up since the US tariff announcement.
Key results, April 2025
- Business confidence: 49.3 (Prev: 57.5)
- Expectations for own trading activity: 47.7 (Prev: 48.6)
- Activity vs same month one year ago: 11.3 (Prev: 0.8)
- Inflation expectations: 2.65% (Prev: 2.63%)
- Pricing intentions: 49.3 (Prev: 51.2)
The ANZ April business opinion survey – the first one held since the US “Liberation Day” tariff announcement – was remarkably steady. Sentiment about general conditions was softer compared to March, but firm’s own-activity expectations were little changed, and remain at high levels.
ANZ did note that responses were weaker in the later part of the month, albeit based on a small sample. There was also some divergence in responses by sector, with confidence picking up in the more domestically-focused services sectors, while it fell in the more trade-exposed manufacturing and agricultural sectors.
A net 11% of firms said that conditions were better than a year ago, a strong lift from the March reading. This does at least point to some consistency in the responses, since it was in April last year when this measure fell sharply. Employment was also reported to be slightly higher compared to a year ago.
The pricing gauges of the survey were mixed. A net 78% of firms expect their own costs to increase, compared to 74% in March. This measure has been picking up since late last year, and likely reflects the fall in the New Zealand dollar over that time (though the currency actually rose strongly in the second half of April). However, firms’ own pricing intentions eased back slightly, and expectations of the inflation rate over the year ahead were little changed.
Overall, businesses seem to have taken a measured view so far of the impact of the US tariffs. That may change over time, once we see whether or not the hard data supports some of the more dire predictions about the impact on the global economy. As we noted in our initial assessment, the direct impact of the 10% on NZ exports is unwelcome but is likely to be manageable; the indirect impacts will be more significant but are harder to assess, and will depend in part on how policymakers in other countries respond.
