New Zealand Business Confidence Rises to +53, Price-Rise Intentions Reach 52%
Key Facts
New Zealand business confidence rose one point to +53 in October, while firms’ own activity expectations fell two points to +46, according to the ANZ survey released on October 29. By contrast, the past activity index reported by firms rose four points to +15. The reading therefore combines a more positive assessment of conditions firms have experienced with less optimistic expectations for their future activity. The two indices moved in the opposite direction in September, when confidence fell two points to +52 and the own-activity outlook held at +48. The past activity index reported by firms also fell five points to +11 in September before recovering in October.
The improvement in reported past activity extended across all sectors, whose readings remained in positive territory, ranging from 11 to 18 points, according to ANZ. These readings place past activity at positive levels across sectors, despite the decline in firms’ own activity expectations in October. The bank said the confidence shock that brought the economy close to a standstill in the second quarter did not recur, despite oil prices rising again. That backdrop provides context for the current indicators: reported activity improved from September, while firms’ own expectations fell. The past activity index is not equivalent to expectations for future activity; the survey records a different movement in each.
On prices, intentions to raise prices rose four points to a net 52% of firms, the highest level since May, according to the ANZ survey. Firms said they expected to implement the increases during the three months following the survey, averaging 1.9%, the highest since June. The net share of firms expecting their costs to rise held at 81.9% in October, the same proportion recorded in September. Annual inflation expectations rose to 3.31% in October from 3.25% the previous month. The figures show higher pricing intentions and inflation expectations, while firms’ cost expectations were unchanged between the two months.
After the decision, the New Zealand dollar fell by as much as 1.7% to a session low of 0.55831 U.S. dollars. Mike Hollahan, director of Elicits Financial, said of the market move ahead of the decision: "The market got that wrong." The governor signalled the possibility of further increases at future meetings, while the institution said tighter monetary policy was likely to be required, subject to the economic outlook. ANZ’s next Business Outlook survey is scheduled for November 30, 2026, at 1 p.m. local time.