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REPEAT: MNI POLICY: New Zealand Biz Investment Intentions Fall

Repeats Story Initially Transmitted at 01:09 GMT Sep 26/21:09 EST Sep 25
--Confidence Up But Deeply in Negative; Has Been Negative For 11 Straight
Surveys
By Sophia Rodrigues
     SYDNEY (MNI) -  - Business confidence rose in September but remained in a
deeply negative territory while investment intentions fell further into
negative, the ANZ bank's New Zealand business outlook survey for September
published Wednesday showed.
     Below are our key observations from the survey that are likely to have
implications for the Reserve Bank of New Zealand's monetary policy:
     --Business confidence rose 12 points in September to be at the highest
level since May but at -38.3 remained in a deeply negative zone. Activity
outlook also rose in September but at 7.8 points was at a relatively low level. 
     --A key disappointment in the survey and one that has significant
implication for monetary policy was investment intentions which fell further
into negative at -9.2 points from -4.7. Investment intentions has seldom been
negative in the survey's history, so a negative outcome for two consecutive
months needs particular attention because it is considered as a fairly good
indicator of near-term economic activity.
     --Most other indicators saw improvement in September, with export
intentions in particular rising to 18.6 from 7.8, likely reflecting the
depreciation in the New Zealand dollar in recent months.
     --While activity outlook overall improved, expectations in the retail
sector dropped 11 points to be the least positive at -13. ANZ says this is
surprisingly pessimistic given its own ANZ Consumer Confidence Survey showed
households still believe it is a good time to spend.
     --Inflation expectations fell for the second straight month, though the
decline was relatively modest -- 2.12% in September vs 2.16% in August and 2.24%
in July.
     --ANZ said that for this survey they asked firms about the largest problem
they face and once again they said finding skilled labour was the biggest issue,
with 26% of firms identifying this as their biggest problem. This could have
implications for wage growth in the economy and thus for RBNZ's monetary policy.
--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

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