MNI 5 Things: New Zealand ANZ Survey Signals Construction Risk

--Confidence Deeply in Negative; Has Been Negative For 8 Straight Surveys

By Sophia Rodrigues

     SYDNEY (MNI) -  - Below are the five observations we made from the ANZ

bank's New Zealand business outlook survey for June published Wednesday:

     --Business confidence fell further in June to the lowest since November and

has been in the negative zone for the eighth straight survey. Confidence has

been in the negative for all the five main sectors for the fourth straight

month, with the worst confidence in retail (-48.1) and the highest in services,

though this worsened further in June (-34.9 from -25.2 in May). 

     --Activity outlook also eased in June. Among the industries, retailers

remain the least positive at +5.7 while manufacturers are the most upbeat at

+15.6.

     --Commercial construction intentions fell sharply in June to -10.5, the

lowest since 2010. Residential construction intentions rose a tad, to 18.2 in

June from 17.4 in May. Together construction intentions are a worry for the

outlook for the economy given this was a significant drag for Q1 GDP growth.

Businesses cited credit availability as a factor dragging down construction.

     --The survey contained a special question on the most important problems

faced by businesses and they said it was lack of skilled workers especially in

construction, manufacturing and services. Regulation was the second most

important problem cited by businesses.

     --Inflation expectations rose further in June but still not to a level

indicating inflationary pressure in the economy. Pricing intentions were little

changed. A bright spot was rise in pricing intentions in the retail industry but

ANZ has pointed to expected profitability which fell to -17, suggesting limited

ability by retailers to pass on cost increased in the face of strong

competition.

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

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