Source: Radio New Zealand
A net one percent of respondents think economic conditions will improve in coming months, compared to 39 percent in the previous survey. RNZ / Rebekah Parsons-King
Business sentiment has plummeted in the first quarter of this year as the Middle East conflict weighed on confidence.
The Institute of Economic Research’s December quarter business survey shows a net one percent of respondents think economic conditions will improve in coming months, compared to 39 percent in the December survey.
That is the lowest level of confidence since September 2024.
Confidence diverged across industries. Construction had the most negative outlook while manufacturing had the highest confidence.
But firms reported demand remained steady, with the number expecting a future improvement easing only slightly to 13 percent.
Firms planned to invest more and hire staff but also expected higher costs.
NZIER principal economist Christina Leung said cost and pricing pressures suggested the risk of persistent inflation remaine low, as weak demand limited the ability of businesses to raise prices.
She expected the Reserve Bank to start hiking interest rates in July.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
