Business confidence in New Zealand has plummeted to negative territory as firms grapple with rising costs and economic uncertainty. The ANZ Business Confidence Survey reveals that business confidence dropped from a net 32.5 percent in March to minus 10.6 percent in April.
The survey highlights significant shifts in inflation expectations and consumer sentiment. Inflation expectations for the coming year rose from 3.1 percent to 3.8 percent. The ANZ-Roy Morgan Consumer Confidence index fell 11 points in April to 80.3, marking its lowest reading in approximately three years.
Key findings:
- Perceptions of current personal financial situations fell 11 points to a net -31%, the weakest reading since mid-2008.
- The future conditions index dropped from 96.7 to 85.9, its lowest level in two years.
- The current conditions index decreased from 83.1 to 71.9, the weakest since October 2023.
- The net proportion of households viewing now as a good time to buy a major household item fell to -25, its lowest since September 2024.
Sharon Zollner, chief economist at ANZ, noted that the decline reflects firms postponing risky decisions due to uncertainty surrounding economic conditions. She stated, “It’s a response to uncertainty to maybe defer risky decisions – and investing or employing someone are both risky decisions to make.”
Zollner also pointed out that the oil price shock is impacting household budgets directly through petrol prices and indirectly by raising concerns about job security and overall economic conditions. Observers have noted that the scale and speed of this collapse in confidence is notable.
The pressure on budgets is evident, particularly through rising costs of living, which Zollner suggests has further implications for households and businesses alike.
