December 19, 2024 00:50 GMT
NEW ZEALAND: ANZ Business Survey Points To Turning Point
NEW ZEALAND
After extremely weak Q3 growth data, the ANZ business survey continued to sound a more positive note with the outlook rising to 50.3 from 48.0 in December. Business confidence was down moderately to 62.3 from 64.9, but remains elevated. According to this survey, Q4 should see an improvement in activity as the past own activity rose 10 points to be at zero.
NZ ANZ business confidence vs activity outlook
Source: MNI - Market News/Refintiv
- The RBNZ is forecasting headline CPI to ease 0.1pp to 2.1% y/y in Q4, which quarterly business inflation expectations are consistent with. However, there was a pickup in price/cost components in December, which will be monitored.
- 3-month ahead cost expectations rose sharply to 70.1 from 62.9 with ANZ noting the increase was across sectors except retail but is currently putting down to volatility. Also wage expectations in 12 months picked up to 79.2 from 75.5.
- As a result, 3-month ahead pricing intentions remained high at 42.7 up from 42.5 and 1-year inflation expectations rose 0.1pp to 2.6%.
NZ ANZ business price/cost measures
Source: MNI - Market News/Refintiv
- In terms of activity, only employment and export intentions didn’t rise. Residential & commercial construction were their highest since 2021, helping to drive investment intentions to 21.5 from 18.0. This is good news given capex fell 5.0% y/y in Q3.
- Employment compared to a year ago deteriorated to -13.3 from -11.6 with every sector negative and hiring intentions easing only 0.4 points to 14.3, but should improve given the pickup in activity.
- When asking firms what their biggest problems were, costs/prices were steady to lower in Q4, but finding skilled labour increased signalling some constraints.
Keep reading...Show less
269 words