Business confidence climbs amid interest rates fall
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Loading... - Faith Tyler
- 29 Aug 2024
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Business confidence in New Zealand has climbed to its highest level in a decade, driven by falling interest rates and hopes for an economic rebound. According to ANZ's August survey, general business sentiment surged by 23 points to a net 51% optimism, marking the highest level since May 2014.
The survey's own activity measure, which is closely watched as a more direct indicator of business conditions, jumped 21 points to 37% optimism, reaching a seven-year high.
ANZ Chief Economist Sharon Zollner noted that while business sentiment had been improving even before the recent Reserve Bank of New Zealand (RBNZ) rate cut, the starting point was still very low. "Things are looking up, albeit from a pretty dark place for many firms," Zollner commented. She cautioned that despite the optimism, past activity levels—which correlate well with GDP—remained weak, sitting at a net -23% pessimism.
Inflation indicators from the survey were mixed. Although more firms reported plans to raise prices compared to July, overall inflation expectations declined, falling back within the RBNZ's target range of 1-3%.
