Manufacturing rose six-fold to 35 percent. Photo: UnSplash/ Silvia Brazzoduro
- Business confidence unchanged at 50 pct in September: ANZ survey
- Firms' own activity outlook rises slightly, investment intentions fall
- Inflation expectations remain anchored
- ANZ sees more rates easing on the way
Business sentiment was resilient in September with the manufacturing sector showing signs of life.
ANZ's monthly sentiment headline measure was unchanged at a net 50 percent of firms expecting an improvement in the year ahead, but the more closely followed measure of businesses' own activity rose to a net 43 percent - the best reading in five months.
ANZ said the survey would have been better, but confidence took a hit among late survey respondents following the weak gross domestic product (GDP) data released mid-month.
Chief economist Sharon Zollner said the survey still pointed to a very uneven economic recovery.
"Forward-looking activity indicators saw a mix of rises and falls this month," she said.
Zollner said past activity was the best indicator of GDP and was looking brighter for retail, but construction remained under significant pressure.
The survey showed one-year inflation expectations remain anchored, rising marginally from 2.63 percent to 2.71 percent.
The survey showed firms expecting slightly better profits, and hiring expectations rose slightly, led by manufacturing which rose six-fold to 35 percent.
Zollner said profitability and low consumer spending continue to haunt firms keen for a return to growth.
"Overall, the disinflationary issues of competition and low turnover continue to dominate the inflationary problems of high wages and other costs."
But that had a silver lining as it would keep the Reserve Bank focused on lowering interest rates.
"The good news is that the RBNZ is now seeing things that way as well, and is set to backstop the growth outlook with a lower Official Cash Rate (OCR)," Zollner said.
"While there's uncertainty about the exact path of the OCR over coming weeks and months, the upshot is it will get to wherever it needs to be to ensure that the recovery we are all forecasting happens."
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
