NZ: Business confidence likely to boast concerns regarding coalition discussions - Westpac

New Zealand business confidence fell to a two-year low (0.0) in September, following a slightly soft result in August and while September’s survey reflected the impact of election uncertainty, October’s survey is likely to boast further concerns regarding the ensuing coalition discussions, according to analysts at Westpac.

Key Quotes

“However, given the timing of the survey the effect of the change in government is unlikely to be captured this month.”

“Firms’ own activity outlooks eased to 29.6, a low not seen since Q1 2016. Outside of the election, the September survey supports our slightly softer view of the economic outlook. The own activity results supports a GDP forecast of 2.5-3%, with economic growth for the year likely to ebb on the softer side of the range.”

“Capacity utilisation fell sharply in the previous survey. Conversely, inflation expectations rose by 10 basis points to 1.98% (August: 1.88%), which is underpinned by the rise in overall pricing intentions and higher fuel prices observed over the month.”