New Zealand business confidence shows some positive developments: think tank

NEW Zealand’s business confidence in the first quarter showed some positive developments with both business confidence and firms’ own trading activity recovering slightly, a private think tank said on Tuesday (Apr 4).

A net 66 per cent of firms surveyed expected general business conditions to deteriorate compared with 70 per cent pessimism in the previous quarter, the New Zealand Institute of Economic Research’s (Nzier) quarterly survey of business opinion (QSBO) showed.

On a seasonally adjusted basis, 61 per cent expected business conditions to worsen, versus 74 per cent pessimism recorded in the previous period. The survey’s measure of capacity utilisation rose to 94.0 per cent, from the previous quarter’s 93.7 per cent.

Nzier said there are signs of capacity pressures easing in the New Zealand economy as demand continued to soften in the first quarter of 2023.

“The tightening in monetary policy by the Reserve Bank since November 2021 looks to be gaining traction in dampening demand in the economy,” it said.

Builders were most downbeat in the March quarter. This reflects a continued weakening in demand, with more building sector firms reporting a decline in new orders and output, Nzier said in its report. REUTERS