Miles Workman, senior economist at ANZ, points out that consistent with ANZ’s own Business Outlook Survey, the NZIER’s Quarterly Survey of Business Opinion showed business confidence remained in the doldrums in the June quarter.
Key Quotes
“Views on the general business situation softened to 31% of respondents feeling pessimistic in Q2, versus 28% in Q1. Economic headwinds such as high labour costs, margin squeeze, and an increasingly uncertain demand outlook continue to weigh.”
“Pessimism amongst manufacturers led declines, corroborating what we’ve seen in the recent PMI data and suggesting New Zealand isn’t immune to the global manufacturing slowdown currently underway.”
“As expected, businesses’ reported activity levels continue to reflect an economy that went broadly sideways over the first half of 2019.”
“Looking ahead to the September quarter, a net 4% of firms are expecting softer activity. But as always, the question is how much of this will actually eventuate. We are forecasting economic momentum to gradually lift from the second half of the year, but with headwinds persisting, we expect this to be relatively hard yards versus the RBNZ’s February expectation of a rapid bounce-back (last week’s OCR Review suggests the RBNZ’s forecast will be revised down).”
“All up, today’s release suggests economic momentum remained pretty lacklustre in Q2, with the softer pace of expansion indicating domestic inflation will soften in time.”
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