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Preview of the Q2 New Zealand business survey, QSBO, expected to show a lift | Forexlive

The New Zealand Institute of Economic Research (NZIER) Quarterly Survey of Business Opinion (QSBO) is due at 2200 GMT.

BNZ on what to expect:

  • expected to show a lift in confidence and activity indicators, as per the recent monthly readings of the ANZ survey. The value-add of the release will be the indicators on capacity pressures, expected to show a monetary policy-friendly fall, with businesses indicating they are seeing it much easier to find labour after the surge in net migration.

Westpac on what to expect:

  • The NZIER’s survey of business conditions lifted in the early part of this year, but continued to point to tough trading conditions. Notably, gauges of trading activity remained low, while ongoing cost pressures have continued to eat away at margins.
  • We expect that the June confidence survey will highlight ongoing headwinds in the business sector, including continued pressure on margins and softening demand. However, some of the challenges that businesses have been dealing with over the past year, including shortages of staff, have now started to ease. As a result, although business sentiment is set to remain low in the June survey, it is likely to tick higher from the levels we saw at the start of the year.

WPAC’s graph:

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The NZ QSBO is a widely watched indicator of New Zealand’s economic health:

  • it provides insight into the views of businesses on the current state of the economy and expectations for the future
  • the survey has been running since 1961

Key indicators from the survey include:

  • Business Confidence, measuring overall sentiment in the business community about the state of the economy. It can be an important leading indicator of economic activity, as positive business confidence can lead to increased investment and hiring, while negative confidence can have the opposite effect.

  • Own Activity Outlook, which assesses firms’ expectations of their own trading activity in the next three months. It’s considered one of the more reliable indicators of future GDP growth.

  • Employment and Investment Intentions indications are used to show whether businesses plan to increase or decrease investment in capital and hiring. This can be a good indicator of future employment and investment activity.
  • Capacity Utilization measures how much of their potential output firms are currently producing. High capacity utilization can indicate strong demand and potential inflationary pressure.
  • Cost and Price Indicators are used a gauge of inflation pressures. These measure firms’ expectations of changes in costs and prices, which can be an indicator of future inflation.