Source: Radio New Zealand
123RF
- Business confidence reaches multi-decade highs
- Firms report improving past activity, optimistic about the outlook
- Employment has also lifted
Business confidence has hit its highest level in 30 years on improving activity and on expectations of an economic rebound.
ANZ’s Business Outlook survey showed headline confidence rose 7 points to a net 74 percent expecting better conditions.
The more closely followed own activity outlook measure also rose 7 points to 61 percent positive, also its highest level in 30 years.
Firms’ reported past activity lifting, up 7 points to net 29 percent positive – its highest level since August 2021.
“The improvement in reported past activity (the best indicator of GDP in the survey) is strikingly broad-based and suggests annual GDP growth is going to head north rapidly,” ANZ chief economist Sharon Zollner said.
In a positive sign for the job market, past employment also improved to its highest level since November 2022.
“Past employment is also recovering quickly, but retail is dragging the chain,” Zollner said.
One-year ahead inflation expectations were unchanged at 2.7 percent.
“In a potentially concerning sign, difficulty finding skilled labour is already picking up, but it remains much more muted than a few years ago, and disinflationary issues of competition and low turnover continue to dominate,” Zollner said.
However, she said the broad-based lift in business sentiment was encouraging, and “things are clearly looking up”.
“It’s true that the agri sector is completely out of synch and commodity prices are now falling just as the rest of the economy picks up, but just as agri buoyancy didn’t prevent a broad-based slowdown, falling commodity prices will not now derail the broader cyclical recovery,” Zollner said.
“Recent reassuring words from the RBNZ Governor about not intending to hike rates any time soon will hopefully take the edge off any confidence hit from the sharp market reaction to the RBNZ’s November message that cuts were almost certainly at an end.”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
