Business confidence rises amid still ‘subdued’ activity

Monday, 30 June 2025

Profits and employment intentions in the construction industry remain notably weak.

Business confidence is improving according to a monthly survey conducted by ANZ, but there is a trend towards firms expecting increases in their costs and prices.

The bank reported that a net 46% of those polled were expecting “general business conditions” to have improved in a year’s time, up 9 percentage points and reversing a dip in sentiment in April and May.

Firms’ assessment of their own prospects rose 6 percentage points, with a net 41% positive.

ANZ said there had been a solid jump in investment intentions, probably reflecting approval for the Government’s flagship $6.6 billion “Investment Boost” Budget initiative.

In a commentary on the survey, Westpac senior economist Michael Gordon noted though that the most significant lift in investment intentions was in the agriculture sector, where that would also have been fuelled by recent strength in export prices.

A net 10% of firms had cut staff numbers and a net 46% were expecting to raise their prices imminently, with more firms reporting higher costs in the pipeline, ANZ also said.

ANZ chief economist Sharon Zollner described the survey as “a mixed bag” with firms’ assessment of their own past activity and employment trends both very subdued.

“It continues to be a difficult business environment for many,” she said. “Dark clouds globally are impeding risk-taking, though we did see the rebound in many forward-looking activity indicators.

“In terms of what firms are actually experiencing, there’s been a bit of a slump recently in both activity and employment.”

The survey comes amid a slew of regular and new data on changing sentiment and ongoing uncertainty over the continued pace of the long-touted economic recovery.

Broker Forsyth Barr last week released what it believed to be New Zealand’s “largest business survey” based on the polling of more than 1400 business owners, directors, managers, employees and contractors in June.

It said businesses overall expected the year ahead to be better than the one just finished and also that they had seen an improvement in demand over the past three months, but construction remained stalled and retailers reported a loss of momentum.

The Institute of Economic Research is due to release its closely watched quarterly survey of business opinion on Tuesday.