NZIER Quarterly Survey of Business Opinion (QSBO).
NZIER main points from the report:
- net 73 percent of businesses expect general economic conditions to deteriorate over the coming months – the weakest over the survey’s history (ie since 1974)
- activity in their own business, a net 13 percent of firms reported a decline in activity over the past quarter. This was the weakest since June 2020 survey when the full impact of the first COVID-19 lockdown was captured
- Firms have become much more cautious and are now looking to reduce staff numbers and pare back on investment plans
- shortages of skilled and unskilled staff remain acute
- a growing proportion of firms are also starting to report sales as the primary constraint for their business, suggesting weakening demand
- a greater proportion of businesses passing higher costs on by increasing their prices, profitability has weakened
- the pick-up in costs and prices points to high inflation persisting into 2023
- With almost half of mortgages due for repricing over the coming year, many of those mortgages will be rolling off historically low fixed-term mortgage rates of around 2 to 3 percent onto significantly higher rates of 6 to 7 percent. Consequently, substantially higher mortgage repayments should drive a slowing in retail spending over the coming year.
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This is a dour report and its unlikely to get much better fort this current quarter. The Reserve Bank of New Zealand is expected to continue tightening policy head ing to the coming NZ recession.