Business confidence remains in the doldrums

New Zealand business confidence remained sluggish in November, with general sentiment and business views of their own activity virtually unchanged from the previous month.

In all, 37.1% of the companies surveyed as part of the ANZ business outlook survey in November expect a deterioration in general economic conditions over the next 12 months, with no change by report to October. Agriculture remained the most withdrawn sector, followed by retail trade.

The perception that companies have their own activity, which is more strongly correlated with actual economic results, has remained positive, with a net forecast of 7.6% increase in activity relative to at 7.4 in October.

"At the national level, business climate indicators seem to be staying in a certain trend," said Sharon Zollner, ANZ chief economist.

Business and consumer confidence has fallen since the 2017 elections, but good economic data has denied the sentiment.

Zollner said that the ANZ survey seems to have "overestimated the strength of headwinds that hold back growth, given the resilience found in" hard "economic data.

However, this also reflects the fact that companies are currently experiencing a "mixed bag" with strong demand offset by cost concerns, the ability to transmit them and capacity constraints, she said.

The October ANZ survey revealed that 28.2% of companies had plans to increase their prices, up from 32.2% in October.

Inflation expectations increased slightly to 2.29% from 2.22 the previous month.

At the same time, 4.1% of companies plan to reduce their investments over the next year, compared to 3.3%.

Today's survey showed an improvement in employment intentions, with a net increase of 2.2% from 0.3% in October.

Expected profits remained low with a net negative balance of 13.5%, against 15.3% negative, expecting a decline in profits when they surveyed in October.

Construction intentions improved markedly, with residential intentions setting at 29.2% versus 4.5% in the previous survey, while commercial intentions were positive at 16, 7% compared to 23.8% in the previous survey.

"It was encouraging to see a rebound in residential and commercial construction in November, the data may be volatile, but the resumption of commercial construction intentions was particularly notable.The rebound was concentrated in Auckland, Canterbury remains weak," said Zollner. I said.