NZ business confidence falls for second month, dragged down by agriculture

New Zealand business confidence fell for a second month, with the agricultural sector remaining pessimistic about the general economic outlook and profits, while construction remained the most bullish.

A net 32 percent of firms expect general business conditions to improve in the year ahead, according to the ANZ Business Outlook, down from 35 percent in the March survey. Firms seeing a pickup in their own business activity in the year ahead fell to a net 30.3 percent from 32.4 percent.

Confidence is still above the historical average of plus 8 percent, ANZ said.

Sentiment in agriculture actually improved in the latest survey, with a net 5.7 percent of those polled seeing worse times ahead of the economy, an improvement from 9.9 percent seeing harder times in the next 12 months in the March survey. Since then, rains across much of the country have alleviated some of the effects of drought.

A net 7.9 percent of farm-related industries saw profits falling in the next 12 months, down from a net 33.4 percent a month earlier.

The construction remained the most upbeat, with a net 54.5 percent seeing a pickup in the economy in the year ahead and 51.5 percent seeing an improvement in their own business. Residential construction was the most bullish. A net 40.6 percent saw higher profits in the next 12 months.

Employment intentions remained strongest in the construction sector, with a net 25 percent expecting to take on workers, down from 45.2 percent a month earlier. Overall a net 9.5 percent expected to hire more workers in the year ahead.

Inflation expectations were little changed at 2.31 percent and pricing intentions slipped slightly to 20.5 percent from 22.3 percent expecting to raise prices in last month’s survey.

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