New Zealand - ANZ business survey for May

Activity outlook comes in at 8.5

  • activity prior 7.1

Business confidence -32.0

  • prior -37.5

Via ANZ:

Key points 

  • Headline business confidence (up 6 to net -32%) and firms' views of their own activity (up 2 to net +9%) lifted in May's ANZ Business Outlook, but other activity indicators were a mixed bag.
  • Pricing intentions and reported cost pressures lifted a touch, but inflation expectations fell to their lowest level since early 2017 (1.8%).
  • Residential construction intentions fell sharply again despite the ruling out of a capital gains tax. Employment intentions in the construction sector also fell sharply, to their lowest level since 2009.

ANZ pretty much sum it up with 'mixed bag'. Based on these results there is scope for further RBNZ rate cuts. Especially the falling in inflation expectations … more from ANZ:

  • fall in inflation expectations from 2.04% to 1.81% took it to the lowest level since early 2017
  • expectations entrenched away from the target would present a challenge for monetary policy