The bank’s June 2015 Business Outlook Survey showed that while some survey indicators have remained positive, the general outlook is slipping.
However, some hope remains – New Zealand is only just in negative territory, with a net 2% of businesses feeling pessimistic about the economy.
Changes in growth prospects
Firms’ own activity expectations – which ANZ referred to as ‘the single best growth indicator’ – eased to a three year low according to the report, leaving it below the global average.
Employment intentions also receded, as did investment and export intentions.
The biggest drop was in profit expectations, which fell by 11 points.
There were some improvements: the outlook for commercial construction intentions increased by eight points.
Leading sectors ‘downbeat’
Agriculture was universally the least confident sector, with decreases across all survey indicators.
Confidence in the construction sector had also weakened, with the industry displaying the largest drop in activity expectations.
ANZ used its Composite Confidence Gauge to confirm the deterioration of business assurance, which combined sentiment measure from both businesses and consumers.
“This gauge has been signalling decelerating momentum for three months now,” the report’s authors wrote. “There are greater economic challenges to manage compared to six months ago. Incremental impetus from the rebuild effort is fading.”
The report noted that New Zealand’s main sources of income are butter, steak and wine, and exports of technology, cars and clothes.
“Long-term price trends favour the former; the terms of trade will stabilise and recover over time,” the report predicted. “As Christchurch’s rebuild stimulus fades, fiscal policy will step in and resources will be freed up for the swathe of necessary construction work across the rest of the country.”
According to ANZ, business confidence in New Zealand has slipped into the red for the first time since the Christchurch earthquake in 2011.