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REPEAT: ANALYSIS: NZ Biz Confidence Negative; Construction Up

Repeats Story Initially Transmitted at 00:32 GMT Oct 31/20:32 EST Oct 30
--ANZ Survey Shows Confidence Lowest Since September 2015
By Sophia Rodrigues
     SYDNEY (MNI)-  - Confidence among New Zealand firms slipped into negative
territory in October for the first time since September 2015, reflecting the
uncertainty of businesses about the new government.
     Most of the survey responses were received in the first half of the month,
before the new government was announced, so the survey outcome is more a
reflection about the uncertainty about the outcome, rather than the outcome
itself.
     It's unclear if the responses would be different if the outcome itself had
been known for the full survey period.  This will only be known in the November
survey.
     The October survey, published by ANZ on Tuesday, showed business confidence
fell over 10 points to -10.1 from zero in September. The activity outlook,
however, fell only slightly.
     A bright spot in the survey was the rebound in both commercial and
residential construction, though both series have been volatile in recent
months.
     Export intentions eased in the October survey but the New Zealand dollar
has weakened in recent weeks, so there is a possibility of a rebound next month.
     One worry was the fall in the expectation for inflation in one year, though
at 1.93% it remained close to the mid-point of the Reserve Bank of New Zealand's
target band.
     Another area of watch, according to ANZ chief economist Cameron Bagrie, is
the composite growth indicator.
     "Our composite growth indicator is still flagging the potential for solid
growth of around 4%, largely because a softening in business indicators is being
offset by higher consumer confidence. However, we focus on the change in this
indicator as well as the level," Bagrie said.
     "This indicator has softened from 4.9% to 3.9% in the last three months;
that's a material shift and warrants further monitoring," he wrote in a note.
     Overall, the survey results suggest the Reserve Bank of New Zealand will
make no change to its monetary policy outlook at the Official Cash Rate decision
on November 9, though there is some possibility that growth and inflation
numbers could be downgraded slightly.
     Below are details from the survey: 
                          October  September
--------------------------------------------
Business Confidence         -10.1        0.0
Activity Outlook             22.2       29.6
Exports                      20.0       24.5
Investment Intention         12.3       13.2
Employment Intention         14.2       15.1
Interest rates               41.0       41.6
Pricing Intention            20.2       21.1
Inflation Expectation       1.93%      1.98%
Ease of Credit              -30.7      -26.2
Residential Construction     31.3       17.6
Commercial Construction      42.8       17.7
--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com
[TOPICS: MTABLE]

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