New Zealand business confidence surged in Q4, reinforcing signs that an economic recovery is starting to form. The New Zealand Institute of Economic Research (NZIER) said a net 39% of firms expect better general economic conditions in the months ahead, a sharp rise from 17% in the September quarter and the strongest reading since March 2014.
NZIER noted that while a gap remains between headline confidence and firms’ own domestic trading activity, the direction of travel is clearly improving. The survey suggests the impact of earlier interest-rate cuts is now filtering through the broader economy, lifting sentiment even as activity indicators lag.
Inflation signals was reassuring. Cost and pricing indicators point to broadly contained pressures in the December quarter, with cost pressures easing and a net 37% of firms reporting higher costs.
With demand recovering but inflation subdued, NZIER expects no further OCR cuts this cycle, forecasting the RBNZ’s Official Cash Rate to trough at 2.25% before hikes begin in the second half of 2026.
 said a net 39% of firms expect better general economic conditions in the months ahead, a sharp rise from 17% in the September quarter and the strongest reading since March 2014.){kind=link}