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Anne Boniface, senior economist at Westpac, ntes that New Zealand’s headline business confidence in the ANZBO survey slumped to its lowest level since the depths of the GFC in 2008.

Key Quotes

“There was also a marked deterioration in the own activity component of today’s survey with this measure slipping into negative territory for the first time since 2009. Employment, investment and export intentions all weakened even further.”

“This deterioration in business confidence comes despite a big rate cut from the RBNZ in August. Around one third of the responses to the August survey were received post the RBNZ’s surprise 50 basis point rate cut. However, it doesn’t appear that responses were significantly different before and after this event.”

“That will be disappointing for the RBNZ who would have been hoping that its dramatic interest rate cut will have spurred firms to increase investment.”

“Today’s data underlines our view the economy is set to get worse before it gets better. While the RBNZ is likely to remain on hold in September, today’s survey supports our view of a 25 basis point rate cut in November.”