Business confidence has continued to lift, rising five points in July to -13, the highest read since September 2021, the latest ANZ Business Outlook Survey shows. But expected own activity, usually considered a better predictor of the economic outlook, eased two points to +1. “The economy is slowing, but certainly not coming to a sudden stop. Activity indicators were a mixed bag in July, but broadly, the gains from the previous month were more or less maintained”, said ANZ chief economist Sharon Zollner. The survey showed lifts in business confidence, export intentions, and residential construction intentions, but expected own activity slipped. Employment intentions, investment intentions, capacity utilisation and profit expectations were all largely unchanged. “Firms remain wary, with most activity indicators subdued. At the same time, though, most are well off their lows of late last year,” Zollner said. “The RBNZ is banking on the economy rolling over rapidly; we’re not convinced things are quite that weak.” Fiscal stimulus, population growth, solid household income growth, and now a bottoming housing market, were meaningful offsets to the lagged impacts of tighter monetary policy, weakening export demand, and cost-of-living pressures, she said. “We are forecasting a recession and associated rising unemployment. Inflation expectations and pricing intentions continued to ease slowly but steadily. The proportion of firms reporting higher costs ticked up slightly, but that followed the largest fall last month. The downward trend remained intact, Zollner said. A net 62 per cent of firms in the retail sector said they expected to lift their prices in the next three months. “That’s high, but it’s the lowest read since March 2021,” Zollner said. The retail, manufacturing and services sectors saw the most marked improvement in activity indicators over the month (apart from a sharp fall in manufacturing sector investment intentions). The construction and agriculture sectors saw the biggest falls in activity indicators over the month, but there were exceptions here too: sharply higher residential construction intentions and stronger agriculture sector employment (particularly forward-looking intentions, though reported employment also rose.  (ICE SYDNEY)

Fonte notizia: NZ HERALD