New Zealand Business Confidence Rises Despite Fuel Price Surge

New Zealand's business confidence showed a significant improvement in the third quarter of 2026, despite rising fuel prices and geopolitical tensions. The New Zealand Institute of Economic Research (NZIER) reported that a net 43% of firms expected business conditions to improve, a sharp rise from just 8% optimism in the previous quarter. The survey, conducted between September 9 and 28, captured the impact of a surge in fuel prices following renewed conflict between the United States and Iran.

Christina Leung, principal economist at NZIER, noted a persistent divergence between firms' current weak activity and their more optimistic outlook for the next quarter. The survey's measure of capacity utilization also edged up to 91.0% from 90.8% in the prior quarter. While global oil supply and price volatility remained a concern, the immediate effect on business sentiment appeared minimal.

NZIER suggested that the stabilization in costs and pricing indicators reduced the risk of higher fuel prices contributing to broader inflation pressures. Leung stated that further cash rate hikes were not necessary this year, contrasting with New Zealand's central bank, which raised the cash rate by 25 basis points to 2.75% in September and signaled potential further tightening.