WELLINGTON (Reuters) -- New Zealand's business confidence continued to worsen in the second quarter of this year as companies grappled with increased costs and higher interest rates, a private think tank said on Tuesday.
A net 65% of companies surveyed expected general business conditions to deteriorate compared with 40% pessimism in the previous quarter, the New Zealand Institute of Economic Research's (NZIER) quarterly survey of business opinion showed.
It added that business confidence is now at its lowest level since the first quarter of 2020 when the COVID-19 pandemic was declared.
On a seasonally adjusted basis, 62% expected business conditions to worsen, versus 34% pessimism recorded in the previous period. The survey's measure of capacity utilization fell to 93.4%, from the previous quarter's 97.1%.
The services and building sectors were the most downbeat in the June quarter. The building sector faces acute capacity constraints, and the services sector expects weaker demand as interest rates move higher, NZIER said in its report.
A net 78% reported increased costs in the June quarter, it said. Despite the shakier outlook for the New Zealand economy, inflation pressures have continued to intensify, the report said.