A challenging 12 months for ANZ
Business confidence has picked up since hitting a 10-year low last month, according to a survey by ANZ.
The bank said a net 42 per cent of respondents still reported they expected general business conditions to deteriorate in the year ahead.
But that was a 12-point improvement from the 54 per cent figure in its previous survey.
Firms’ expectations for their own activity over the year ahead, which ANZ describes as ‘‘a better economic indicator’’, fell two points to a net negative 4 per cent.
That was the fifth fall in a row and the lowest reading since April 2009, ANZ said.
But pricing intentions rose 6 points, with a net 24 per cent of firms expecting to raise prices in the year ahead.
ANZ chief economist Sharon Zollner said there was ‘‘something for everyone’’ in its ANZ Business Outlook survey, with ‘‘mixed moves and different interpretations possible, depending largely on whether you choose to focus on the change or the level’’.
But she said the headline increase in business confidence was welcome.
Westpac yesterday changed its forecast that the Reserve Bank would cut the official cash rate next month.
Westpac chief economist Dominick Stephens said it now expected the Reserve Bank to leave the rate unchanged at 1 per cent when it released its next monetary policy statement.
‘‘The balance of recent domestic data does not justify a cut, global sentiment has improved, and overseas central banks have indicated they will pause,’’ he said.
BNZ research head Stephen Toplis also said on Tuesday that the Reserve Bank was ‘‘starting to sound less than committed to another cut’’.
Westpac continued to expect a rate cut in February, based on its view that ‘‘global economic sentiment will worsen again’’, Stephens said.
But that was not the way the dice had fallen in the past couple of months, Stephens said, speaking before ANZ released the results of its confidence survey. ‘‘Economic growth remains subdued and business confidence is very low. But on balance the outlook for inflation and employment has actually lifted a little since August, because the exchange rate is well down, inflation has surprised to the upside, and the housing market is stirring,’’ he said.