MNI POLICY: New Zealand ANZ Business Survey Puzzling For RBNZ

--Confidence Deeply in Negative; Has Been Negative For 9 Straight Surveys

By Sophia Rodrigues

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

bank's New Zealand business outlook survey for July published Tuesday, that are

likely to have implications for the Reserve Bank of New Zealand's monetary

policy:

     --Business confidence and activity outlook fell further in July to the

lowest level since May 2008 and May 2009 respectively. Such poor levels of

confidence and activity outlook is surprising, given the economy has support

from fiscal stimulus and the elevated terms of trade. The data is likely to make

it difficult for the RBNZ to form a view on the economy because the current

levels of confidence and activity points to a sharp slowing in growth outlook.

     --The deeply negative business confidence contrasts with ANZ's consumer

confidence which is around historical average. Based on elevated consumer

confidence, ANZ's composite GDP growth indicator still points to an expansionary

economy. 

     --Pricing intentions rose in July while inflation expectations fell a tad.

This part of the survey would comfort the RBNZ about inflation progressing

toward its target mid-point.

     --Commercial construction fell in July to the lowest level since 2010 and

residential construction eased further.

     --Among sectors, retail was the least optimistic which contrasts with

elevated consumer confidence.

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

[TOPICS: MANDS$,M$A$$$,M$N$$$,MT$$$$]