NZ Business Confidence Surges, But Inflation Expectations Ease

Business confidence in New Zealand has surged for the second month in a row, jumping 19 points to 56 in July. This marks a significant improvement from June's reading of 37. However, inflation expectations and cost expectations have eased, with inflation expectations dipping to 3.14% from 3.36% and cost expectations falling to 78 from 85.

The survey also showed that pricing intentions remain high, with a net 47% of respondents expecting to raise their prices in the next three months. This is down 4 points from June's reading. In contrast, activity indicators were lower in responses received later in the month after a reminder was sent, suggesting that some businesses may be cautious about future growth.

The Reserve Bank of New Zealand (RBNZ) hiked the Official Cash Rate (OCR) between the early and late responses, which may have contributed to the mixed signals from business leaders. The RBNZ's move could also have an impact on inflation expectations in the coming months.