Building sector buoys business confidence

AUCKLAND: Business confidence continues to improve, construction firms being the most optimistic and agriculture and retail the least.

ANZ Bank’s October survey has headline sentiment at a net 15.7%, one point lower than the reading earlier in the month, but up significantly on last month’s net 28.5%.

The more closely followed ‘‘own activity’’ measure, which is how firms view their own outlook, has bounced back to preCovid levels of 4.7%.

However, while headline confidence has improved, ANZ chief economist Sharon Zollner said it was not fair to say the bounce was across the board.

‘‘There are mixed messages out of the retail sector. Both activity and employment are reported to be higher, and costs and pricing intentions are certainly not subdued. However, the perceived outlook for both activity and profitability is cloudy,’’ she said.

‘‘Agriculture ownactivity indicators slipped, possibly reflecting concerns about dry conditions or labour shortages, but the sector is otherwise relatively upbeat.’’

Indicators from manufacturers showed signs of improvement, but export and investment intentions fell.

‘‘Low export intentions and weakening in parts of the manufacturing sector speak to the fact that this is a global shock. Goods exports have been a bright spot in the economy and we expect that to remain the case. People have to eat, and global food supply chains are under pressure for a range of reasons this year . . . Exporters are quite right to worry that challenges lie ahead.’’

Firms should expect to face tougher times as the cushioning of the wage subsidy fell away, but for now levels were robust.

Challenges lay ahead, with the seasonal impact on tourism only starting to be felt and direct fiscal support waning.

‘‘The housing market is supporting ‘the vibe’ but also starting to spark financial stability concerns.’’ — RNZ