Overview
- NZIER’s Q3 survey showed net 18% of firms expect better conditions versus 22% previously, with capacity utilisation easing to 89.1%.
- Businesses reported weaker activity and retrenched plans, with a net 23% cutting staff and more intending to reduce spending on plant, machinery, and buildings.
- Inflation signals ticked higher as a net 11% of firms raised prices, reversing last quarter’s reported price cuts and pointing to firmer cost pressures.
- A Reuters poll points to a 25bp rate cut at Wednesday’s RBNZ meeting, and NZIER says a 50bp move is not precluded if policymakers were already inclined to go larger.
- ING forecasts a 25bp cut and cautions that markets may be too dovish on further easing without Q3 CPI, while Westpac says the mixed survey could test the RBNZ’s confidence as the economy has contracted in three of the past five quarters.