sign uplog in
Want to go ad-free? Find out how, here.

Latest preliminary results from ANZ Business Outlook suggest the post-lockdown economic rebound may have run its course

Latest preliminary results from ANZ Business Outlook suggest the post-lockdown economic rebound may have run its course

It was on the floor, and then it started to get up...and now it's going down again.

Business confidence, as measured by the ANZ Business Outlook Survey, has deteriorated markedly again after reviving in the immediate post-lockdown period.

The survey's headline perhaps says it all: "Preliminary business confidence - teetering."

ANZ's chief economist Sharon Zollner said the preliminary ANZ Business Outlook data for August saw most forward-looking activity indicators deteriorate from July, but not all.

The headline business confidence measure deteriorated 10 points to -42.4%, and the measure of own activity slipped 8 points to -17%.

“The preliminary August read of the ANZ Business Outlook adds to the evidence that the post-lockdown rebound may have run its course,” Zollner said.

“For own activity, a read of -17% can only be described as a dire level, but it remains well off its lockdown low of -55%.”

The ANZ gives these as key points in the latest results:

·A net 15% of firms also expect to reduce investment (an 8-point deterioration) and a net 32% expect lower profits (5 points weaker).

·Conversely, capacity utilisation, which correlates pretty well with GDP, improved 5pts to -3%.

·Compared to the same month a year ago, 7% of businesses reported lower activity – this is a solid improvement of 11pts versus July, but is still a fair way from pre-crisis levels.

·Near-term employment intentions deteriorated 6 points to a net 21% of firms expecting to cut jobs. About the same net percentage of firms report having fewer staff compared to a year earlier.

·Deflationary pressures remain evident but with some mixed monthly moves. Expected costs and pricing intentions eked out small gains, but one-year-ahead inflation expectations fell slightly. All remain much lower than a year ago.

Zollner said there were "three prongs" to this economic crisis: lockdown, closed borders, and an "incredibly synchronised" global slowdown that will hit exports.

"So far, we’ve navigated the first and managed to eliminate the virus in the process (go team!).

“But we’re still a long way from the finish line. And with temporary fiscal support measures poised to roll off in coming months, and the impacts of a closed border to be fully felt only when the peak-tourism summer season arrives, there are plenty of economic hurdles to clear yet. Today’s data is indicative of exactly that.“

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.


Not even after the election, the drum has already been beating for an open border policy.

first it is about wearing mask, then it is about allowing students and workers in, then selected visitors in.


Wait until the subsidies end and people abondon their zombie jobs.

After wage subsidy ends from this week onwards as originally started from 17th March, will still have Income protection to support for 12 weeks but yes unemployment data will hit high and will not be surprised if it touches double digit.


Business confidence was this low or even lower at various times in 2018 and 2019 (ie pre-covid), when the economy was doing just fine. Business confidence has only ever been positive in the last 10 years when National were in power. Those polled are just in a permanent sulk when anyone other than National are in power irrespective of how the economy is actually doing - it's mostly just a proxy for political affiliation. Watch it dive to -70 if Labour get it on the back of a landslide......

Yes, but the 'own activity outlook' is not nearly so partisan, look at the graph.

I'd agree it may be the only really useful part of the whole survey (although it also collapsed when Labour got in, just didn't quite go negative).

Yes, the Labour sulk survey.
Don’t worry JK, Robertson has billions set aside to keep propping up jobs, income, mortgages, whatever.

Your comment reflects short term thinking typical of commentators and politicians.
Business confidence is about how businesses will make their future decisions on employment and investment, especially the data showing own intentions. Once a business makes the decision to hold back, it takes 1-2 years for the change to flow through, and this is why politicians and commentators lose sight of the impacts, it is a slow burn, to start the losses, and then when things improve, to turn on the tap again.
The Government (should have) learned this lesson on Kiwibuild and other projects, intent is only the start of the process, from then you actually have to make it happen, and to be fair.

Who is going to benefit from opening the border with the Cook Islands, not NZ. Mark Richardson said this morning how it would be great to lie on the beaches in Rarotonga but how much is it going to cost in flights and accommodation where the industry has been flat there for the last three months. There will be a financial recoup for both operations, but the two Ronnie's- Richardson and Garner - can afford it anyway. Garner has been beating a drum on a daily basis. Is mediaworks going to relocate the breakfast show there ?

There will be a financial recoup for both operations, but the two Ronnie's- Richardson and Garner - can afford it anyway. Garner has been beating a drum on a daily basis. Is mediaworks going to relocate the breakfast show there ?

I wonder how receptive the target audience is going to be to these clowns if the economic situation does indeed move to 'depression dire.'

Mind you, I was impressed with Garner ripping into the Gnat's housing spokesperson: the woman who looks incapable of putting on a sausage sizzle fundraiser for the party.

Checkout these visualizations of NZ economy, ex Harvard.

You're right. Lack of production/export complexity has a massive role to play in our current economic woes. Years of economic growth built off capital-shallow sectors has resulted in stalled wages, poor productivity and low R&D intensity.

Henry ,thats a big box top left, magenta or mauve?
Another visualization for our travel sector Critically we are approaching the usual peak inward bound . Not only will overseas visitors collapse in absolute numbers, but there usually is a net 500000 more inward bound over the next 6 months all requiring and supporting NZD. Without tourism, migration, and reduced international student numbers how will the economy( and its currency) which undoubtedly , so much reliant on the above , has by timing and handouts so far dodged .

Education (selling immigration by way of schooling), not that there is anything wrong with that.

The pied piper narrative/ paint yourself into a corner is gaining acknowledgement.

Explained here - happy 100 days....

The only thing positive is very low interest rate and it is this low interest rate that is supporting Stock market and Housing market. In NZ housing boom is all that matters being the only indicator of rock star economy.

As long as housing market is popped up - everything will else will be over shadowed be it hospitality and Tourism, International education, immigration....

Ease of credit is looking painful.

I think fragile is the best word to describe the NZ economy right now.
Things will deteriorate, how much by no one knows.

NZ Economy is a version of Cinderella. This is the moment Cinderella found out that the shoe fitted hers, soon she will realise that it's made out of glass and the midnight bell is only a moment away.

That reminds me: there's a Pumpkin on my bench. ready for the chop....

Whether we have a soft or a brutal slowdown at some point there's something else to affect NZ inc... success at squashing c19 means herd immunity is not happening here unlike other countries.

NZ in all its wisdom may go the way of historic populations being eventually wiped out when the virus comes through.
Can't keep those borders shut forever.

Business confidence right now is like a man with terminal cancer who believes he is going to survive , optimistic one day and feeling terrible the next , but still broadly optimistic nevertheless.

And the South Auckland WuHuFlu cluster is not gonna Boost things muchly....