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Analysts at TD Securities point out that NZ’s  June permits fell -7.6%/m in June, but follows a blistering few months, such that Q2 permits rose +8.2%/q (after +5.8%/q in Q1).

Key Quotes

“Business confidence continues to be a protest against anti-business government policies (higher wages, lower migration, slaughtering cows) but inflation expectations are still crucial. Activity slid to +4 and confidence plummeted to -45 in July.”

“Looking closer, pricing intentions strong at +29, inflation expectations ease a tad from 2.29% to 2.24%, but still remaining above mid-point 2%. Exports solid at +12 and dwelling construction at +16. Profits taking a hit (fall from -13 to -17) but not surprising with the costs of production accelerating but little opportunity to pass on in the current environment.”