ANZ's business outlook survey showed headline confidence rising nine points in June to a net 46 percent, expecting better business conditions in the year ahead. Photo: Unsplash/ Li Rezaei
- Business confidence rises for the first time in three months
- Forward-looking activity indicators lifted
- Past activity indicators fell, signalling weak economic growth in the second quarter
Business sentiment has improved for the first time in three months as firms begin to look past tariff turmoil.
ANZ's business outlook survey showed headline confidence rising nine points in June to a net 46 percent, expecting better business conditions in the year ahead.
The more closely followed measure of businesses' own outlooks rose six points to 41 percent.
However, in another sign of slow economic recovery, past activity fell three points, while past employment was flat and at subdued levels.
Inflation expectations remained steady at 2.71 percent.
"It continues to be a difficult business environment for many," ANZ chief economist Sharon Zollner said.
ANZ chief economist Sharon Zollner. Photo: ABC / Luke Bowden
"Costs are still going up and margins are being squeezed, with low turnover and a highly competitive environment making it very difficult to recoup margins."
Zollner said forward-looking activity indicators were generally better as tariff noise subsided.
"However, in terms of what firms are experiencing, things remain pretty soft," she said.
"Economy-wide reported past activity fell marginally."
Zollner said pricing and cost expectations remained too high to be in line with the Reserve Bank's inflation forecasts, but said firms' own inflation expectations were "well-behaved".
ANZ also asked firms what drove their investment decisions - a question asked every three months.
"Since we last asked the question in March, amongst firms planning to invest, central government policy has increased as a driver and is now the second most important reason for investing (presumably related to the Investment Boost in the May Budget)," Zollner said.
ANZ said competition and low turnover continued to be the main problems for firms, with the agriculture sector faring better than others - thanks to strong prices for key export commodities.
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
