First Impressions: NZ Q3 business confidence - Westpac

Analysts at Westpac offered their first impressions for the NZ Quarterly Survey of Business Opinion, September quarter 2017.

Key Quotes:

"The NZIER Quarterly Survey of Business Opinion showed a drop in overall business sentiment, with a net 7% of firms positive about the outlook compared to 17% in the June quarter. However, indicators of firms' own activity held up quite well compared to last quarter. The survey was conducted over September, so general confidence may well have been affected by the uncertainty around the 23 September general election.

A net 13% of firms reported growth in their own activity, compared to 17% in June. The decline is consistent with our view that GDP growth in the September quarter will be a little slower than the 0.8% rise recorded in June. In contrast, firms' expectations for the coming quarter picked up to the highest level in a year. Expectations of hiring, investment in capital and profits were all similar to last quarter.

The pricing measures were also similar to last quarter, both in terms of expected costs and price increases. Capacity utilisation fell slightly to 92.6%, and although finding workers was reported to be more difficult, fewer firms reported this as their biggest constraint on growth. These measures are broadly consistent with inflation nearing the RBNZ's 2% target, but they don't suggest a risk of inflation breaking higher."