ANZ says the “slightly rebounding” activity indicators in its latest confidence survey are “apparently good news”.
Business confidence has “lifted off the floor,” says ANZ.
The bank said data from its latest business confidence survey suggested 48% of businesses expected tougher times ahead and a net 4% saw worse prospects for their own business.
Those numbers represented an improvement of 9 percentage points and 5 percentage points, respectively, in its July survey.
ANZ said most of the survey’s confidence indicators rose for a second month, but inflationary pressures remained intense despite a small net drop of 4% in the proportion of businesses planning to raise prices.
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Paul Gruenwald, Chief Global Economist at S&P told a seminar on the New Zealand economy on Tuesday that economies were clearly slowing, but said sentiment indicators looked “gloomy than the actual data.”
Credit reporting firm Equifax on Monday reported a further drop in the number of businesses seeking loans and other credit in the three months to the end of June.
This generally reflects a drop in economic confidence and signals a decrease in business owners’ appetite to invest.
Equifax said business credit applications to lenders fell nearly 12% from the same quarter in 2021, in what was the fourth straight decline, and remained below pre-Covid levels.
Chief executive Angus Luffman said the decline in inquiries was to be expected given that business confidence at the time was at a low not seen since the initial stages of the Covid pandemic and the days of the global financial crisis.
“Uncertainty created by rising interest rates, above-target inflation and supply chain constraints will impact demand for business credit, but it is labor shortages. that probably have the biggest impact on investment plans,” he said.
“If companies struggle to access the workforce to implement their growth plans, they will limit the capital they allocate and borrow.”