New Zealand-NZIER Q3 Business Survey -14 (+5 prior)

New Zealand Institute of Economic Research (NZIER) Q3 Business Opinion Survey

Comes in at -14 for Q3 vs. +5 in Q2

• Registers the lowest reading since the first quarter of 2011
• NZIER says the result translates to a GDP growth rate of around 2.5% but warn the result may be weaker as the survey does not include agriculture

Comments from NZIER:

• Drop in confidence is in stark contrast to firms' own trading activity ...net 12% of businesses reported an improvement in their own trading activity over the past quarter
• Net 17 percent of businesses expecting an improvement next quarter
• The recent dominance of negative news about the New Zealand economy has left many businesses feeling uneasy about general business conditions, but few have seen a direct effect on demand in their own business
• Firms still looking to expand, cautiously
• Inflationary pressures continue to weaken ... Capacity pressures have eased from its record high last quarter, and competitive pressures are also helping to put downward pressure on prices
• The weak inflation environment suggests further easing by the Reserve Bank - we expect one further interest rate cut by the end of this year.