New Zealand Institute of Economic Research Quarterly Survey of Business Opinion
In (very) brief:
- Net 16 percent of businesses expect better economic conditions over coming months (down from a net 26 percent of businesses in the previous quarter)
- The decrease in confidence comes despite businesses reporting their own activity holding firm, suggesting annual growth in the New Zealand economy will remain solid around 3 percent over the coming quarters
- Confidence fell in all sectors surveyed
- Sentiment remains positive in the building sector
- Building firms also report a continued easing in the shortage of unskilled labour, although skilled labour remains very difficult to find
- A decline in confidence in the manufacturing and retail sectors
- Demand indicators such as output and new orders mixed, but point to a still-solid sales outlook
- There is more caution when it comes to hiring, particularly amongst retailers
- Cost and price indicators point to a further lift in inflation over the coming year
- Capacity utilisation amongst builders and manufacturers lifted to a record high of 93.6 percent in the March 2017 quarter
- Businesses are also finding it easier to raise prices, particularly in the building sector
- This continued improvement in pricing power will be welcome for the Reserve Bank, given its concern last year that inflation would remain persistently low
(any bolding above is mine)
NZIER conclude with their take on the survey for RBNZ implications
- However, with inflation lifting from a low base we expect the Reserve Bank will hold off lifting the Official Cash Rate until the middle of next year
