Analysts at ANZ note that New Zealand’s Quarterly Survey of Business Opinion (QSBO) for Q3 has deteriorated further.

“Activity indicators suggest downside risk to our (already subdued) growth forecasts. Headline confidence remains in pessimistic territory, slipping further to its lowest level since March 2009. Domestic trading activity, which has been providing a decent steer on economic growth lately, suggests growth could disappoint in Q3. In fact, taken at face value it suggests annual growth of close to 1%. That said, some indicators for Q4 did bounce, including activity, profitability, and employment intentions, suggesting activity may stabilise towards the end of the year. Several measures of capacity eased, which doesn’t bode well for the inflation outlook. Profitability continues to be squeezed, although both costs and pricing intentions eased in Q3, suggesting little pipeline inflationary pressure.”