New Zealand Business ConfidenceJanuary 2023 Data - 1970-2022 Historical

The ANZ Business Outlook Index in New Zealand bounced 18 points to -52 in January 2023, rising from a record low of -70.2 in December as the November rate hike shock and talk of a “deliberately engineered” recession appear to have worn off. However, indicators remained at very subdued levels. Activity measures saw a partial recovery from their December falls, led by manufacturing, services, and retail. Meanwhile, inflation and pricing pressures kept their strong grasp, with pricing intentions and cost expectations moving higher and inflation expectations holding at around 6%. Most indicators improved in January, including Own Activity Outlook (-15.8 in Jan vs -25.6 in Dec), Export Intentions (-5.4 vs -10), Investment Intentions (-13.7 vs -20.5), Employment Intentions (-11.1 vs -16.3) and Profit Expectations (-42.6 vs -52.7).

The ANZ Business Outlook Index in New Zealand fell to -70.2 in December 2022 from 57.1 in November, sinking to a new record low as firms contended with persistent inflationary pressures, aggressive monetary tightening and a widely anticipated recession next year. The report noted that the Reserve Bank of New Zealand’s historic tightening campaign, hawkish forecasts and warning of a deliberate recession appeared to have achieved shock value. Many indicators slid to Global Financial Crisis lows including Own Activity Outlook (-25.6), Investment Intentions (-20.5), Capacity Utilization (-14.3) and Profit Expectations (-52.7). Sharp declines were also seen in Commercial Construction (-30.3), Employment Intentions (-16.3) and Ease of Credit (-66.7). On the inflationary front, an intention to raise prices is most widespread in the retail sector (74% of firms intend to raise their prices in the next three months) and services (67%).

The ANZ Business Outlook Index in New Zealand dropped to -57.1 in November 2022 from -42.7 in October, as firms continued to grapple with intense inflationary pressures, declining margins, labor shortages and tightening financial conditions. Activity measures were generally lower, led by sharp falls in ease of credit, profit expectations and own activity outlook. Meanwhile, residential construction intentions plummeted to a fresh record low. Inflation pressures remain intense but are easing slowly. Pricing intentions fell 6 points to a net 59% of firms intending to raise their prices in the next three months, remaining high but peaked at 80.5% in March. Similarly, the average price increase that firms anticipate in the next three months has dropped from 5.7% in April to 3.7%.