New Zealand business confidence down due to high costs, interest rates

Written by on July 4, 2022

A sailing boat can be seen in front of the central business district (CBD) of Wellington in New Zealand, July 2, 2017. REUTERS/David Gray

Register now for FREE unlimited access to Reuters.com

WELLINGTON, July 5 – New Zealand’s business confidence continued to worsen in the second quarter of this year as companies grappled with increased costs and higher interest rates, a private think tank said on Tuesday.

A net 65% of firms surveyed expected general business conditions to deteriorate compared with 40% pessimism in the previous quarter, the New Zealand Institute of Economic Research’s (NZIER) quarterly survey of business opinion (QSBO) showed.

It added that business confidence is now at its lowest level since the first quarter of 2020 when the COVID-19 pandemic was declared.

Register now for FREE unlimited access to Reuters.com

On a seasonally adjusted basis, 62% expected business conditions to worsen, versus 34% pessimism recorded in the previous period. The survey’s measure of capacity utilisation fell to 93.4%, from the previous quarter’s 97.1%.

The services and building sectors were the most downbeat in the June quarter. The building sector faces acute capacity constraints, and the services sector expects weaker demand as interest rates move higher, NZIER said in its report.

A net 78% reported increased costs in the June quarter, it said. Despite the shakier outlook for the New Zealand economy, inflation pressures have continued to intensify, the report said.

Register now for FREE unlimited access to Reuters.com

Reporting by Lucy Craymer; Editing by Josie Kao and Lisa Shumaker

Our Standards: The Thomson Reuters Trust Principles.

Read More


Reader's opinions

Leave a Reply


Current track

Title

Artist