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NZ business confidence rebounds in June quarter amid cost pressure
The NZIER survey ran from June 10 to July 7, during a temporary US-Iran shipping agreement that briefly eased fuel prices before tensions and fuel costs picked back up.
New Zealand business confidence rebounded in the June quarter, but Forexlive notes the improvement looks narrower than it first appears because the survey period coincided with a temporary easing in fuel price pressure tied to US-Iran shipping conditions.
According to the NZIER Quarterly Survey of Business Opinion, confidence rose to a net 8%, from net -4% in the prior quarter. Firms were also more optimistic, with a net 12% expecting general economic conditions to improve, up from a net 1% previously, while activity in firms remained broadly flat, with a net 1% reporting increased business demand.
Forexlive says the bigger signal for the Reserve Bank of New Zealand is a sharp rise in the share of firms reporting higher costs, suggesting inflation pressure was building even before fuel prices surged again following the reescalation of tensions. The survey also showed softer capacity utilisation, slipping to 90.8% from 91.2%.
Despite the confidence gain, hiring and investment plans stayed cautious. The survey reported a net 10% of firms cutting staff numbers and a net 3% planning to cut investment in buildings, plant, and machinery over the coming year, with renewed geopolitical uncertainty and the run-up to November’s general election cited as potential headwinds.