REPEAT:ANZ New Zealand Business Survey: Infl Expectations Fall

Repeats Story Initially Transmitted at 01:19 GMT Jul 31/21:19 EST Jul 30

--Business Confidence, Activity Outlook Ease Slightly

--Residential, Commercial Construction Intentions Fall

     SYDNEY (MNI) - From ANZ bank's New Zealand business outlook for July

published Monday:

                           July   June

--------------------------------------

Business Confidence        19.4   24.8

Activity Outlook           40.3   42.8

Exports                    32.7   27.0

Investment Intentions      23.0   27.4

Employment Intentions      25.7   24.3

Interest rates             50.6   57.6

Pricing Intentions         27.6   31.1

Inflation Expectations    1.98%  2.03%

Ease of Credit            -27.4  -30.7

Residential Construction   10.5   18.2

Commercial Construction     5.6   28.5

     FACTORS: New Zealand business confidence and activity outlook eased

slightly in July but remained at elevated levels. The fall was mainly due to

decline in investment intentions and profit outlook but both remained well above

historical average levels. On the brighter side, employment intention rose to

the highest since May 2014, and export intentions was the highest since April

2014. 

     Pricing indicators, however, eased with firms' pricing intentions falling

and inflation dropping slightly below the mid-point of the Reserve Bank of New

Zealand target band. Intentions in the residential and construction sector also

fell in July but the agriculture sector was the most optimistic with regards to

business confidence, the activity outlook and profitability

     TAKEAWAY: The details in the survey bode well for the economic outlook but

also mean the RBNZ's policy stance is likely to remain accommodative for longer.

The fall in construction intentions both for residential and construction

sector, along with decline in inflation expectations poses some downside risk to

the official cash rate.

     COMMENTS: ANZ New Zealand chief economist Cameron Bagrie said it's pleasing

to see business sentiment hold up amidst a slow-down in pro-cyclical parts of

the economy such as housing. 

     "It is particularly encouraging that the agriculture sector is now the most

optimistic with regards to business confidence, activity outlook and

profitability. The chilly blast from low dairy prices has dissipated," he said.

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

[TOPICS: MTABLE]