New Zealand firms report higher costs and pricing intentions despite improved confidence, complicating RBNZ policy decisions.
New Zealand business confidence rebounded to a net 8% in the second quarter, up from -4% in March, according to the latest survey. The improvement coincided with a temporary dip in fuel prices during the survey period, though tensions later resurged, pushing prices back up.
Capacity utilization eased slightly to 90.8% from 91.2%, while a net 12% of firms expect economic conditions to improve, up from 1%. However, a sharp rise in firms reporting higher costs signals building inflationary pressures, even before recent fuel price increases.
The mixed signals—softer capacity use alongside firmer pricing intentions—leave the Reserve Bank of New Zealand with a complex outlook, reducing near-term easing prospects.