The latest NZIER Quarterly Survey of Business Opinion (QSBO) indicates a decline in business confidence for the September quarter.
On a seasonally adjusted basis, a net 15% of firms anticipate an improvement in general economic conditions in the months ahead. While it remained positive, it declined from the net 26% who anticipated an improvement in the June quarter.
Economists view the QSBO as the final crucial data point for the Reserve Bank before its Official Cash Rate decision, which will be announced tomorrow.
A net 14% of firms reported a decline in their own business activity during the September quarter, but a net 9% anticipate increased demand in the next quarter.
A net 23% of firms reduced their staff numbers in the September quarter.
Regarding investment plans, a net 13% of firms intend to scale back spending on plant and machinery, while a net 20% plan to reduce investment in buildings over the next year.
Among the sectors surveyed, manufacturing was the least optimistic, with only a net 3% of manufacturers expecting an improvement in general economic conditions.
Retailers remained the most optimistic sector surveyed in the September quarter, even though new orders and sales continued to show weakness.
“Cost pressures in the retail sector remain intense, but the proportion of retailers able to raise prices eased,” NZIER deputy chief executive Christina Leung said.
“In responding to the intense cost pressures and weak demand, a substantial proportion of retailers also reduced staff numbers in the September quarter.”