NZ: Business confidence slumps - TDS

Annette Beacher, Chief Asia-Pacific Macro Strategist at TD Securities, notes that the New Zealand’s August business confidence slumped even further to -50, while own activity remained at +4.

Key Quotes

“As part of the ongoing anti-LNG-government protest vote, the investment and employment net balances sunk to below zero (-5 and -6 respectively). Will real activity follow? NZD slumped anyway. Inflation expectations at 2.2% remain stable (Aug 2.16%, Jul 2.24%).”

“On 20 Sept we look for buoyant Q2 GDP, upside to the Bank's modest +0.5%/q forecast. Q2 retail sales jumped +1.1%/q, while next week Q2 trade (+0.6%pt) and business investment (+0.6%/q) are released.”

“Ahead of those reports, our tracking is +0.7%/q or 2.5%/y, our expected low in annual GDP growth ahead of a stronger H2.”