Aside from retailers, there’s been a rebound in business confidence, with most indicators showing some sign of improvement.
The ANZ Bank’s monthly survey shows 38 percent of firms expect general business conditions to deteriorate over the next year, an improvement of 12 percentage points over August’s survey.
The number expecting better times for their own businesses – which was regarded as a better indicator of economic activity – rose 4 points to 8 percent, with the retail sector the most negative.
While the number of firms expecting to reduce their investment fell another 4 points to 9 percent, there’s been a five point improvement in hiring intentions to -1 percent.
ANZ chief economist Sharon Zollner said the latest survey results were still weak.
“But if the indicators continue to rebound, it will increase the odds that while the economy may have hit a pothole, the wheels are not falling off.”
The latest survey follows the government’s establishment of business advisory council, to be led by Air New Zealand’s chief executive Christopher Luxon.
Businesses’ profit expectations also rose 4 points to -13 percent, with no change to the number expecting credit to be more difficult to obtain.
Finding skilled labour was the single biggest issue affecting a quarter of businesses.
Ms Zollner said the Reserve Bank was likely to leave the official cash rate at 1.75 percent when it releases its update tomorrow.
“We expect that at the OCR Review this week the message will therefore continue to be that the next move in the Official Cash Rate ‘could be up or down’, despite the stronger-than-expected June quarter GDP outturn,” she said.