NZ Business Confidence Holds Steady Amid Middle East Tensions

New Zealand business confidence remained steady in August despite renewed hostilities in the Middle East pushing oil prices higher, according to the ANZ Business Outlook. Past activity jumped to its strongest reading since April, with reported past activity rising six points to 16, led by the services sector.

Business confidence eased two points to 54, while expected own activity dipped one point to 48, both still sitting at very high levels. Westpac senior economist Michael Gordon noted that firms appeared largely unfazed by the renewed conflict.

The picture across sectors was mixed, with retail posting a strong confidence reading of 69, but ANZ Research described it as 'probably a starting point story rather than great expectations'. Agriculture reported negative ease-of-credit conditions at -19, while employment intentions climbed to their highest level since February, led by the services sector.

Business inflation expectations lifted from 3.14% to 3.26%, with more firms expecting to raise prices and a shrinking size of expected cost increases easing to 2.53%. Wage expectations also crept higher, reaching 2.62%, their strongest reading since March. The ANZ-Roy Morgan consumer data reinforced the same inflation theme, with household expectations holding at 4.7%.