ANZ New Zealand Business Outlook: Economic activity measures decline as inflationary pressures emerge

Business Confidence Remains Robust Despite Recent Decline

Although business confidence has slipped by 10 points from its three-decade peak of 74 recorded in December, it remains notably high at 64. Projections for future business activity also saw a decrease of 9 points, yet the current level of 52 is still well above historical averages. Actual business activity in the past period dipped slightly by 3 points to reach 26, marking the second strongest result since August 2021. Meanwhile, employment figures improved, rising by 3 points to +7, the best outcome since October 2022.

Inflation Expectations on the Rise

Indicators of inflation have strengthened, with the proportion of businesses anticipating price increases over the next quarter climbing 5 points to 57%—the highest since March 2023. Additionally, the average expected price hike has grown from 1.8% to 2.1%.