New Zealand business confidence slightly less gloomy

The surveys headline measure showed a net 56.7% of respondents expected the economy to deteriorate over the year ahead. That compared with a 62.6% pessimism level in the previous poll in June.

ANZ said in a note that businesses were well aware the Reserve Bank is on a mission to reduce customer demand to curb inflation so it was no surprise they were feeling apprehensive.

A total of 8.7% of respondents expected their own businesses to shrink in the next 12 months, a slight improvement from 9.1% previously.

ANZ said economy-wide inflation pressures remain intense with 91.3% of business expecting costs to rise.

The rate of increase in costs appears to have stabilised, but it remains far too high, the bank added.

It also noted that supply side factors continue to cause headaches, while a severe lack of labour is also hurting businesses.