Fuel Price Surge Hits Business Confidence, But Optimism Remains
New Zealand businesses showed resilience in September despite rising fuel prices affecting their activity indicators. The ANZ Business Outlook survey revealed a slight dip in headline confidence, down 2 points to 51.9 percent. This still signifies that optimists outnumbered pessimists, albeit amidst ongoing economic and geopolitical uncertainty.
While firms' expectations for their own activity remained largely unchanged at 47.9 percent, reported activity compared to the same period last year fell significantly to 10.8 from 16.4 in August. The survey exposed a clear split between early and late respondents, with the Dubai spot oil price surging from around US$100 per barrel to a peak of US$128 before easing to US$111 by September 22.
The results showed that own-activity expectations plummeted from 52 among early responders to 36 among those who replied later in the month. This was mirrored in firms' recent experience, where retail activity shifted from a net 17 in early responses to -13 in late-month replies. The economy-wide employment reading compared with last year swung from positive 5 to negative 23.
ANZ described the survey as indicating 'a renewed confidence impact' from higher oil prices, but late-month activity readings remained above previous lows seen in March and April. Investment plans held up, while residential construction intentions improved throughout the month. The results varied widely across sectors, with manufacturers remaining among the most upbeat.