ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
Economy

New Zealand business outlook wavers due to costs, interest rates

65% of companies expected conditions to deteriorate: survey

A street in Wellington, New Zealand. A survey showed that business confidence is at its lowest level since the first quarter of 2020.   © Reuters

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.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

Discover the all new Nikkei Asia app

  • Take your reading anywhere with offline reading functions
  • Never miss a story with breaking news alerts
  • Customize your reading experience

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more