October 31, 2024 01:13 GMT
NEW ZEALAND: More Positive Outlook But Pricing Intentions Trending Higher
NEW ZEALAND
Business sentiment continues to improve following 75bp of RBNZ easing. October ANZ business confidence rose almost 5 points to 65.7 and the activity outlook 0.6 points to 45.9, both are the highest in over 10 years. Current activity remains depressed but improved 8 points this month. Inflation expectations eased but pricing intentions continued to drift higher, something the RBNZ is likely to monitor.
NZ ANZ business confidence vs outlook
Source: MNI - Market News/Refinitiv
- Pricing intentions eased 0.1pp to 2.8%, while they rose for the fourth straight month with 44% of businesses intending to increase prices, the highest in 6 months. ANZ cautions that there could be some seasonality to the data. Cost expectations fell over 2 points to 64.2% driven by retail and agriculture, but remains elevated. So do wage expectations at 77% up from 76.4%.
NZ ANZ business survey price/cost components
Source: MNI - Market News/Refinitiv
- Export and investment intentions were higher, with both at multi-year highs. Profit expectations increased almost 5 points to 27.0 with a pickup in retailers.
- Employment has begun to recover, except in retail, with it rising almost 4 points compared to a year ago. At -14.6 it remains weak though. Wage increases compared to a year ago were steady at 3% and are expected to ease to 2.6% in 12-months time. ANZ says wages are now where the RBNZ wants them, ie. consistent with the inflation target.
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