New Zealand business confidence eased in August but stayed at elevated levels, while measures of realized activity strengthened. ANZ Business Confidence slipped from 56.1 to 53.7, and Own Activity Outlook edged down from 49.3 to 48.2. In contrast, reported activity versus a year earlier jumped from 9.7 to 16.4, led by services, suggesting improvement in actual trading conditions was becoming more visible even as forward-looking confidence softened.
Other activity indicators were mixed but generally constructive. Export intentions rose from 26.6 to 31.4, while employment intentions increased from 18.1 to 19.3. Profit expectations fell from 28.7 to 23.1, and investment intentions eased from 22.8 to 22.1. Residential and commercial construction intentions also declined, although ANZ noted revised methodology has made both series less volatile and more representative of activity across firms.
Inflation indicators leaned firmer. Pricing intentions rose from 47.2 to 51.0, cost expectations increased from 78.2 to 80.8, and one-year inflation expectations climbed from 3.14% to 3.26%. Wage expectations also edged up from 2.52% to 2.62%. However, expected size of cost increases three months ahead fell from 2.70% to 2.53%, leaving a mixed picture in which more firms expect higher costs and prices, but anticipated magnitude of those cost increases is moderating.
Data Summary
| Component | Current | Previous | Trend |
|---|---|---|---|
| Business Confidence | 53.7 | 56.1 | Lower |
| Own Activity Outlook | 48.2 | 49.3 | Lower |
| Activity vs. 1 year ago | 16.4 | 9.7 | Stronger |
| Export Intentions | 31.4 | 26.6 | Stronger |
| Investment Intentions | 22.1 | 22.8 | Slightly lower |
| Employment Intentions | 19.3 | 18.1 | Stronger |
| Profit Expectations | 23.1 | 28.7 | Lower |
| Pricing Intentions, net % | 51.0 | 47.2 | Higher |
| Cost Expectations, net % | 80.8 | 78.2 | Higher |
| Cost Expectations, 3m out | 2.53% | 2.70% | Lower |
| Wage Expectations, 12m out | 2.62% | 2.52% | Higher |
| Inflation Expectations, 1y out | 3.26% | 3.14% | Higher |
Key Takeaways
- ANZ Business Confidence eased from 56.1 to 53.7, while Own Activity Outlook slipped from 49.3 to 48.2, though both stayed at high levels.
- Actual activity offered stronger signal, with reported activity versus a year ago jumping from 9.7 to 16.4, led by services.
- Export intentions strengthened from 26.6 to 31.4, while employment intentions rose from 18.1 to 19.3.
- Profit expectations weakened from 28.7 to 23.1, while investment intentions edged down from 22.8 to 22.1.
- Price indicators firmed: pricing intentions rose from 47.2 to 51.0, cost expectations from 78.2 to 80.8, and one-year inflation expectations from 3.14% to 3.26%.
- Countering that increase in breadth, expected size of cost rises over next three months slowed from 2.70% to 2.53%.
