Satish Ranchod, senior economist at Westpac.
The latest ANZ business outlook business confidence survey showed a modest pick-up in business sentiment, though it remains low. However, there are marked divergences across the economy. Sentiment is very weak in the agricultural sector, and is also low in the manufacturing and retail sectors.
In contrast, businesses in the construction and service sectors are more upbeat.
But while many businesses remain apprehensive about the economic environment in general, they are more upbeat about their own economic prospects. Businesses’ expectations for activity in their own firms actually picked up to 32.1 percent in April (from 29.4 percent in March), with confidence at solid levels in all sectors except agriculture,” says Satish Ranchhod, senior economist at Westpac.
“Businesses’ activity expectations are consistent with our forecast for moderate, albeit it uneven, growth over 2016.
“The pricing components of the survey emphasised that inflationary pressures in the economy remain very subdued. Expectations for inflation over the coming year nudged up slightly to 1.42 percent. That’s just above the record lows reached last month, but the RBNZ may take some comfort from the fact that expectations haven’t declined further.
“However, while inflation expectations remain stable, the number of businesses planning on increasing prices actually pushed down this month, from levels that were already low.”
(Net % expecting increase in next 12 months, except pricing and capacity utilisation: in 3 months’ time)
| >>>box | April | March |
| General business situation | 6.2 | 3.2 |
| Own activity outlook | 32.1 | 29.4 |
| Capacity utilisation expectations | 20.5 | 24.0 |
| Pricing intentions | 16.9 | 17.7 |
| Inflation expectations | 1.42 | 1.38 |
| Investment intentions | 10.8 | 11.4 |
| Employment intentions | 12.7 | 15.5 |
| Export intentions | 22.3 | 21.3 |
| Profit expectations | 16.1 | 13.0 |
