Less than half of firms surveyed are expecting an improvement in the year ahead. Photo: RNZ
- Business confidence dips in April - ANZ survey
- Firms own activity improving, showing recovering economy
- But responses after tariff announcement turn sour, suggesting investment/hiring plans on hold
- ANZ says uncertainty clouds outlook
Business confidence has taken a dip as market turmoil and uncertainty over trade policies overshadows signs of an improving economy.
ANZ's monthly sentiment headline measure showed a nine point fall to a net 49 percent of firms expecting an improvement in the year ahead, while the more closely followed measure of businesses' own outlooks edged one point lower to 48 percent.
Chief economist Sharon Zollner said all the signs are of economic activity improving, but the US government's uncertain trade policies soured sentiment among late responses to the survey.
"The data does support the idea that the turmoil has had a marked negative impact on most forward-looking indicators, and particularly on headline business confidence and businesses' plans to invest. Time will tell whether the impact is lasting."
Zollner said inflation expectations were well anchored at 2.65 percent, but more firms expected to face higher costs than to put up their own prices.
"That indicates margin squeeze - a long-running theme - amidst persistent cost pressures."
ANZ recently lowered its economic forecasts because of uncertainty and a stumbling economic recovery, and forecast deeper interest rate cuts by the Reserve Bank.
Zollner said only time would tell how deep and lasting the tariffs measures would affect business intentions and activity.
"That in itself will depend not least on whether trade spats de-escalate or worsen from here."
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