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

ANZ reports major business confidence bounce-back, warning if inflation pressures continue to rise rapidly, mortgages rates might not remain rock-bottom for as long as assumed

ANZ reports major business confidence bounce-back, warning if inflation pressures continue to rise rapidly, mortgages rates might not remain rock-bottom for as long as assumed

Business confidence has spiked to the highest level since before Labour came into government in 2017, according to the latest ANZ Business Outlook Survey.

A net 9.4% of businesses surveyed had a positive view of the economy - a whopping 16-point improvement from November, and the first time since August 2017 that more respondents were optimistic than pessimistic.

Meanwhile a net 21.7% of respondents had a rosy view of their own activity - a 13-point improvement from November and the strongest result since March 2018.

ANZ chief economist Sharon Zollner said: “Every activity indicator was higher. Inflation pressure is building.

“Construction is manic. Agriculture, while improving, remains subdued.

“Manufacturers and retailers are most impacted by supply issues from freight disruptions, while manufacturers report the most difficulty getting goods to customers.”

Overall, Zollner said: “The New Zealand economy is showing impressive resilience. After a 14% bounce back in the September quarter, the economy is the same size it was pre-Covid.

“It’s not the same shape though. Behind the numbers lie some real stresses and strains, in both overheated sectors like construction, and chilled ones like tourism.

“We expect a technical recession in Q4 and Q1 as the policy-fuelled bounce fades and the tourism hole hurts, though the imminent prospect of travel bubbles is very encouraging.

“But as regards the recent growth bounce, increasing debt, whether public through fiscal policy, or private sector debt, is not a sustainable source of growth. In particular, rapidly increasing house prices in this environment is outright worrying.

“If inflation pressures continue to rise rapidly (albeit from low levels), that will bring into question the common assumption that mortgage rates will remain rock-bottom for many years to come.

“But we should celebrate the fact that our economy is going to come out of 2020 in far better shape, cyclically and structurally, than most.”

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.


The resilience of the NZ Economy truly is outstanding. Incredible that Business Confidence now exceeds 2017 after a Pandemic! Sure we've had record fiscal and monetary stimulus but 2021 really is looking positive and I hope the companies either give back the subsidy when conditions allow (Warehouse is the number 1 in the firing line) and give their employees a good rise.

Amazing how full scale cheer leading from all the banksters, economists, politicians and real estate agents can hoodwink the NZ flock.

Party like a Rockstar this Christmas. The Rockstar economy is back!

Two things will make NZ economy a rock star -- more people coming in and lower mortgage rates.

OK, now I know for sure this is a parody account.

LOL. Nice joke.

A lot of usually younger audiences die from alcohol/drugs binge during a rock star concert, ever consider to have economy like a jazz or porn star? which is more likely killed by drug OD by stat?


Time to start a very slow but progressive increase in interest rates. The sooner the better. Let's re-balance the economy now, with moderation, rather than having to do it later with steeper action.

Increasing interest rates (which would be deductible to investors) will catch up aspiring and existing home owners as well. There are more targeted and effective ways to re-balance the economy without catching people who own the house they live in (or aspire to) in the net, although it would take political leadership that does not currently exist in NZ.

Agreed. Let's keep recent FHB out of the firing line. They've already stuck their necks out enough.

I agree but I doubt the RBNZ would since the global outlook is still uncertain, despite the vaccine.

I think there are better solutions than blanket interest rate increases. I agree they need to rise, but there is other low hanging fruit to pick first.

I gave my kids the green light to buy a home... if they can't get a mortgage (no chance) I will scratch and scrape to find the cash to lend them (as a mortgage). Cheap to borrow which ain't changing for a while and they will probably get left further behind if they wait. Until now they didn't seem ready to have the responsibility

Every OZ Banks & govt, gave these immediate rosy future outlook is basically to steer away Mr. Orr & his team from further correcting the NZ economic stability. I've said to the team, stead fast and do the following;
- Put the negative OCR quickly, as this will eat those OZ Banks decades of profit. They need healthy BMI.
- Balanced, more but smaller FLPs can be approved into housing via credit union & building society.
- Hit 2021-25 with annual QE of 100b, to assist flexi/wages subsidy, Insurance, Carbon Neutral/Climate changes.