New Zealand ANZ Business Confidence index in March experienced a slight dip, moving from -43.3 to -43.4, while the Own Activity Outlook improved marginally, rising from -9.2 to -8.5. However, export intentions, investment intentions, employment intentions, and pricing intentions all experienced declines. Cost expectations also fell from 88.3 to 86.4, but profit expectations rose from -37.7 to -33.9. Inflation expectations dropped from 5.94 to 5.82. According to ANZ, firms are cautious but persevering, with indicators suggesting a soft landing.
Although the activity indicators are subdued, the labor market tightness is gradually shifting, and inflation and cost indicators are easing slowly. Nevertheless, the challenging environment is putting pressure on expected profitability as firms navigate high cost inflation and uncertain future demand. ANZ noted that the winter season might reveal more challenges as tourist numbers decline, but for now, the slowdown appears to align with the Reserve Bank’s intentions.
