ANZ’s Business Confidence data shows firms continue to remain pessimistic about the year ahead

ANZ’s Business Confidence data shows firms continue to remain pessimistic about the year ahead

The Prime Minister’s “elephant in the room” has just got a bit bigger, with business confidence figures showing firms continue to remain pessimistic about the year ahead.

But ANZ’s chief economists Sharon Zollner says the reasons for the drop are not entirely the fault of the Government.

ANZ’s Business Confidence data shows a net 27% of businesses are pessimistic about the year ahead, up four points from April.

Firms' views of their own activity, which has the stronger correlation with GDP growth, dipped from +18 to +14 points – the lowest reading since November.

Zollner says the survey shows there are a lot of tailwinds and headwinds in the economy right now – “but the headwinds are prevailing a little more.”

She says the construction sector is “no question” the area where businesses are the most pessimistic.

“[We’re hearing] anecdotes about cost overruns and project delays, about very, very thin and accidental negative margins and well-publicised losses.”

She says the retail sector is also downbeat.

The drop in confidence will come as a concern for Prime Minister Jacinda Ardern, who told a pre-Budget business lunch earlier this month the figures were an “elephant in the room.”

She said she wanted to change business’ perceptions, adding that the economy was performing very well.

“The perceptions you have determine your actions – whether you invest, whether you export, whether you take risks. It can also determine how you feel about all those things.

“Whether or not our perceptions are accurate is another question. Our perceptions are often influenced by our beliefs in general or our assumptions.”

But Zollner says the drop can’t be all pinned on the Government, as some of the issues outlined in the survey have been going on for a while.

“I would look through the election noise and say that business confidence has actually been trending downwards since the middle of last year.”

For example, firms have been complaining about the availability of credit since the middle of 2015.

This month’s Budget was seen by many as conservative, with the Government taking on less debt, and spending less money despite a higher tax take and a large surplus.

But the effects of the Budget on business confidence will have to wait until next month, as the survey was mostly taken before Budget day.

National's Economic Development Spokesman Paul Goldsmith says the confidence figures show the Government has done nothing to give businesses a boost.

“Policies that hamper economic growth are piling up: whether it is the decision to axe the oil and gas sector, taxing petrol more as prices rise, strengthening unions at the expense of workers, or slashing foreign investment."

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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(Racist rant removed. Please remember our commenting policy, Ed -

while Jimmy Rogers sees the future.

Can you articulate what Kiwi culture is so that every NZer can follow without the feeling of being pushed or forced please?

The government expects businesses to have faith in our economy and increase their capacity with more capital expenditure and hiring. I feel the government itself is tiptoeing around its promise of investing in infrastructure development and so far we have only seen consultations without a proper plan in place.
Not a day goes by when Grant Robertson does not appear on a TV show or a business conference somewhere talking up the economy and appealing to private investors to pick up the tab on our basic infra needs.

Managing a country is not and should not be a game but is now becoming a game in NZ now.

I think you need to back your comment up with some specifics. It's meaningless Your comment pretty much says " I am not a Labour supporter" and that's about it.


I support whoever make NZ a better place to live and a place where everyone is encouraged to achieve their best.

OK let's count.
1. lack of national strategy -- what NZ is going to be like in next 30 yrs?

2. are all NZers equal regardless of their ethnicity, color and creed?

3. Kiwibuild is a joke -- an MBIE internal and unpublished study show that 2/3 of Kiwibuild would become rentals and unless Kiwibuild can saturate both home-owner and rental markets, it cannot achieve what the Govt says it would

4. Sentencing and Parole Reform Act 2010 will soon abolished by this Govt to save $. Soon the cost of committing a criminal act will be zero. This government encourages criminal acts!

5. Any economic growth plans from this government or any government? NZ has been relying on exporting tourism, education and agriculture products for toooo loooooong...

6. NZ has the 2nd highest minimum wage while the GDP per capita only ranks around 23rd among OECD countries. And minimum wage will still be increased to $20/h in 2020. Sounds ridiculous?

And so on....

This government policies do NOT encourage everyone to achieve their best. Quite the contrary, their policies encourage people to get the most from doing the least!

I agree with xing and thanks for your comment Jamin. If only more people could share your partisan views, we could be more like the Americans.
FYI I acknowledge Labour for admitting to the underinvestment problem which National has dodged for the entirety of its tenure. However, I don't see the current government act with the sense of urgency that one should given the enormous backlog.


It's not that complicated Jacinda.

Business doesn't like the fact that your government makes policy decisions for philosophical reasons without proper analysis, planning or consultation. The Taranaki oil disaster is the best example. Businesses get extremely nervous about investing money with the threat of government interference always hanging over them.

We also understand that markets and the economy are all connected, and we can see that your policies show no consistency, no overall strategy or plan and no recognition of the inter-connectedness of everything. The best example of this is electricity, where you are stopping coal mining (price goes up), gas exploration (price goes up), planning to charge more for carbon (price goes up), wanting to charge for water (price goes up) and then also giving 'winter energy poverty' bribes to people reviewing electricity prices because you want electricity prices to go down? It reeks of an opposition mindset making policy up on the fly on an issue by issue basis, with massive contradictions and no overall strategy or plan.

You also push up petrol prices through your taxes and increasing carbon costs then make a big deal about standard commercial pricing practices that every business does. Can anyone tell me the logic of an environmentally focussed government trying to keep petrol prices down, which incentivizes more fossil fuel burning? If the environment was 'the nuclear moment of our generation' then you would want petrol prices as high as they can be to make EVs more economic and public transport more attractive. Well, if you had any business sense, strategic thinking and consistency rather than making policy up on the fly.

We can all see the emperor has no clothes and it ain't going to get better until you fix it.

OK Labours plans are not perfect. But the position they are in regarding climate change is a very difficult one with no easy options .
I would like to hear your plan on how to reduce carbon emissions in a long term meaningful way without harming the economy too much. Is your plan we should do nothing and let the planet burn?
Without a better alternative offered how can any reader really take your comments seriously?

You aren't getting it. I'm not saying I have an issue with stopping gas exploration or burning coal. I'm saying that doing so without any analysis, notice, consultation whilst also wanting the price of petrol and electricity to go down is contradictory and ignorant.

If you say you want to save the environment, but acknowledge that some costs and risks will go up, and you make those changes in a thoughtful and structured way with proper analysis behind each decision that's fine.

If you say you want to make our economy strong today and aren't concerned about the environment because you don't like the cost that's fine.

Both of those positions are consistent. Labours is totally inconsistent and hypocritical. They aren't being honest with themselves and/or the public. Business people can see through that.

'I have a drinking issue but I'm totally against alcoholism'

So it must be the other CoL that National are pilloring for holding a bunch of working groups to recommend best policy then? P.S I'm a business man...

I have no idea of what point you're making, but I didn't vote National and I don't consider them significantly different to Labour. The only real difference is that they have better quality people because they don't have stupid processes

Having dealt woth both, I can categorically tell you that is untrue. I will agree with you that there is little differnce but I my line of work I deal with a wide range of businesses and while many are doing fine/well, there is a chill wind amongst the Real Estate crowd.

One gets the feeling that a point in time in the future (if we haven't completely soiled our own nest by then), that burning of fossil fuels for common energy/transportation, will be looked back upon with similar distaste/human madness as that of burning witches or attempting to find the edge of the earth. Along the lines of 'WTF were they thinking'

I don't think math clubs is saying Fossil Fuels are good. I think he's saying Labour is trying to have it cake and eat it too. e.g.

Labour said "No more fossil fuels drilling they are bad"
but the a couple of weeks late said "You businesses shouldn't be charging so much for fossil fuels"

Labour said "I'll build houses and train more builders"
Now they say "we'll just buy them"

Of course business confident is down, they drive a lot of spending in the economy and you have no idea what they are going to do next.

"One gets the feeling that a point in time in the future .."
you could not have summarized the rigorous process involved in COL policy-making any better.

In answer to you question about what I would do reduce our emissions ... I would line up all of the carbon emissions we have and do analysis to understand the costs and risks and timeframes of removing that carbon emission source from our economy, given the alternatives to each. I would then work progressively through that list, starting with the cheapest and easiest removals of carbon there is, and not touching the costly and risky stuff until we see technology improvements that make the cost/risk bearable. I would also make sure that none of my other policies or positions my government took was in contradiction to the 'nuclear moment of our generation', such as trying to keep petrol prices down to score cheap political points when in reality a high petrol price is great for the environment.

And I would approach it in this way because I'm used to running businesses where there are constant tradeoffs that you have to make and I would take a structured approach to solving it, like I do in the real world where I make money for myself and others.

And I would also approach it in this way because I am someone that will never be an MP because I wouldn't want the extra hassle and the pay cut.

Not one actual idea mentioned.

You said "cheapest and easiest removals of carbon there is" That's planting trees They have already moved on the 1 billion tree planting programme.

you said "and not touching the costly and risky stuff until we see technology improvements that make the cost/risk bearable" I assume you mean fossil fuels. Current science strongly suggests this simply is not an option and the worlds governments need to act now to force ably phase these out faster than its current speed.
You may not realize this but you are advocating that we really don't do anything. I'm sorry but just sitting back and criticizing others for coming up with ideas while offering no alternatives is just not helpful. Either offer a tangible solution or just get out of the way, the world does not have time any more.

I understand two extra trees have been planted and those by Shane Jones. The planting season is approx 4-5 months and on average 1200 stems a Ha is planted so unless the industry has capacity to raise 100 million seedlings (it doesn,t), the available experienced labour to plant(it doesn't) and 833333 Ha of available & suitable land ( we don't have that much) making election promises to do that planting is either a clear indication of Ministerila Incompetence or just lies to get elected - take your choice.

ideas are easy. Labour has lots of ideas. The point is to have a robust process that gets the best outcome, which is what I have outlined. That's not what Labour is doing.

If you want some more detail, then petrol emissions are going to be the cheapest and easiest to remove, as are industrial processes with electricity and farming the most expensive/risky.

All of them have layers where some emissions within those groups will be very easy to remove and some will be very hard.

There's no easy answer. IF there was we could be doing it. All you can do is work through the list, weighing up costs and risk and making the right trade off calls.

That is NOT what Labour are doing.

EDIT: and planting trees is offsetting the emissions, not removing them from our system. We need to do both.

Planting trees, believe everyone is in favour generally. What would be good to see as well, when and if it ever gets underway in earnest, is the inclusion of NZ hardwoods, black beech, Tawa, Rata for insurance. Nicer decking etc than Kwinana, Purpleheart being stripped out of natural forests and imported here.

Well put. My nest egg is in Term Deposits for another year. Someone else can take the risk investing it after borrowing it from the various banks. I have no faith in this lot.


@mathclub Its worse than all this , firstly almost without exception, not one of our COL leaders has ever have to earn $1 on their own .

They simply have no idea how hard it is , they think the stuff grows on trees, and with their fancy salaries they have become divorced from reality .

Its tax , tax , tax and more tax , squeeze until it hurts , bribes for the sick the lame and the lazy ( and the kids at Uni ) treat wage payers like something the cat dragged in , and spend up large on those who dont pull their weight .

Luckily we wont have these losers around in in 28 months time , and we can clean up their huge mess and get things back on track again

My tax bill hasn’t changed. I might have to pay a couple of bucks a week in regional fuel tax but worth it for some actual results. Not sure what you’re on about.

The column contends business confidence was slipping pre election. Perhaps it was and in which case the removal of what was perceived as a business friendly government is hardly going to reverse that particularly when the perception of the incoming government is quite the opposite. Therefore think the elephant is going to be a long term occupant. And then there is the question of electorate confidence in general. I would wager that that too will fade rapidly once the tax group (Cullen in reality) tell the government what to do and Joe Public becomes aware that the tax agenda, that had to be jettisoned pre election, is to be rolled out plus more and more. And unless they get cracking with some solid effort on all the election rhetoric they promised? Well there are a couple of one term Labour governments that they need to think about.

my view is that business confidence started slipping in a serious way when it became apparent that the election was contestable and that Labour had a chance of getting in with a coalition of deadbeats. That was around the middle of last year.

Correct there was a lot of uncertainty re National not retaining power and that was because National had isolated itself, MMP wise that is, without a solid potential coalition partner. Also National had let themselves fall into the malaise of a third term government. They were fast becoming unpopular.In my view they were by then complacent, conceited and careless too. Otherwise a virtually unrecognised untested Leader of the Opposition would hardly have been able to turn the polls on their heads. And so now we have a government with the singleminded purpose of most previous Labour governments, that considers tax as the panacea to all its problems and as you express measures being introduced are both hasty and ill considered. At this rate this will be a one term government.

Nope. Business confidence was slipping because the banks were slowing lending and the Auckland housing ponzi had halted. Very little to do with the election.

Totally agree

lending and the Auckland property market started stalling well before then. Most businesses don't base their confidence levels off the property market.

Nothing to do with it.

Labour speaks passionately about the need to improve productivity but are horrible when it comes to implementation.
For example, they have planned to kill the oil and gas industry in NZ and in place offered Taranaki with a strange combination of investments from its regional funds - $19m in trails, tracks and museums (tourism) and $100k for alternative energy research. We surely need investment in tourism to replace the lost productivity from a bunch of companies that exclusively employs geologists, engineers and highly-skilled technicians.

Like the points made by mathclub, their goals and execution are a complete contradiction. Wanting lower energy prices but restricting supply and adding tax costs with no investment in generation. The oil/gas replaced with tourism is a productivity disaster!

"standard commercial pricing practices" and big oil are diametrically opposed.

When I think of how confident I feel in the future economically, things the NZ government can effect in any meaningful way come quite far down the list. ( micro bovis probably being the real exception at the moment )
Am I the only one that thinks this way. Surly this is just the nature of being a small fish in a big pond?


Maybe I should elaborate. If you have ever been to business school when they teach strategy one of the external factors that is always present is the Government/Legal environment no mattered which text book you pick us using SWOT or TEMPLES or what ever method you like.

So when you have an unpredictable government (which we have) the risks are considered higher. When you have risk going up confidence suffers

Many an investment and/or business has been ruined by regulatory changes. I personally feel quite vulnerable holding cash as it’s a medium of exchange and has no long term growth potential, but what the heck could you invest in right now that hasn’t got the potential to be burdened with more regulation and/or tax?

PIE funds, of course. Especially global shares etc. But I'm guessing you're not because you sense assets may be overcooked there too?

Yes, everything seems overcooked. I recall speaking to a Greek friend in the early '90s whose family bought a commercial low-rise building on Manners St at a bargain price because he was one of the few that had cash as opposed to needing to borrow. There was a similar deal on a lower floor apartment in Oriental Bay at the time. I want to be that person left standing when it all hits the fan, but I'm losing faith that it will present as it did in the past. I suspect the Banks will fund people through the cycle. If I do go into property I'll go existing commercial and keep my money well out of the way of Taxinda and the Cullenites.

Hi Ex Expat,

Holding cash is not a wise move in my view, in fact you shouldn't hold more than 50% in cash or cash equivalents even if you are an extreme conservative.

As part of a meaningful diversification plan, one should look at few different asset classes and markets. Property is an essential hedge, but cash flow and good yields are also important.

There are many good Active Growth funds returning more than 10% NET pa (PIE funds) -- the tax paid on these returns are what they are.

You might like to look into these - I have never looked back since I found few of these few years ago.

I wouldn’t be counting on that 10% return continuing. Cullen has his beady socialist eyes fixed on thieving more of it to prop up our socialist utopia.

I wouldn't be counting on 10% return continuing - but because it looks increasingly like we're hitting a change point in the cycle.

Not at all surprised that biz is not feeling the Feelz:

  • M.Bovis will hit rural biz hard via compliance costs, lower activity as farms move to more closed-farm configurations, and the economic multipliers via equipment, ute, car sales and maintenance go on hold as chequebooks snap shut. As Keith Woodford notes, MPI have 'not covered themselves with glory' so far and realistically that will continue.
  • The combined monetary effects of MB and the Nurses pay claim will, fairly much clean out the Finance Minister's 'rainy day' contingency fund. Then the Teachers are after another 15%, and Police staff have not piped up yet but must be watching from the cheap seats and biding their time. That cupboard is gonna need another top-up from the Taxpayers' Ever-Capacious Pocket before too long....
  • Budget core external assumptions are all on the wrong side of the ledger despite happy-clappy talk: TWI assumed at 'around 75' is currently 72.99, WTI, assumed at 'around 60' is currently 68.08. The combined effect can be spotted at yer nearest servo, updated daily, and this increased transport cost rattles through every sector of the economy.
  • There is a new minimum wage now, the prospect of more to come, and the promise of enforced collective bargaining for some industries. While biz waits for the lottery to be drawn, who can blame them for feeling a little, shall we say, Beleaguered?

Gubmint is a cloistered world without Clue One about the time value of money. They never have to sell enough on Friday to make payroll on Wednesday following, never have to chase debts, never have to juggle cash flows to make the 20th of the month payments to creditors. Public sector salaries arrive with the regularity of a sunrise, revenue falls into their ledgers like Sky Food off the edge of the bench to a waiting dog, cash-flow worries are non-existent, and the only exception to this happy ignorance is IRD, who certainly know the Time Value of unpaid taxes, and are prone to sending curt notes to remind customers of that fact....

And the Elephant in the Room - the non Gubmint part of the economy - is 70% of GDP,

Well lets be realistic and be honest with ourselves . Cracks have been appearing in the building /construction sector for well over a year now .

The RBNZ has issued countless warning to Banks about property finance , so the banks are gun-shy
Land price expectations should be tempered after a strong run in 2017, and land speculators can afford to sit on their hands , so it a big problem
Compliance costs with safety laws on building sites have spiraled out of control , when what we had previously was more than adequate
Wage rates in the sector have gone up by more than the inflation rate
We have allowed land banking to dominate the supply of land
We have essentially only 3 players in the building supply chain and one is the price -maker and the others are price -takers ........... its rigged , and no one would get away with it elsewhere .

The only sign of optimism was when the Labour Government coalition signalled to the market that they intended to become builders-of -last - resort , so everyone thought it would be a big party .

Now the truth is out , the Government is not going to build or gaurantee anything , they simply cant do it .

In fact the Government has done NOTHING to mitigate the housing "crisis" as I sight below :-

Immigration is still out- of -control .......... 100,000 NON New Zealanders have pitched up here year -to -date
The RMA is a known impediment to rapid development , and the COL will not even tinker with it
Auckland Council continues to treat builders and those stupid enough to try an build a house as a very healthy cash-cow .
The COL does not even have a strategy document or plan as to how they will create 100,000 ADDITONAL new homes
In fact they dont even know the actual extent of the shortage with any degree of accuracy with some economists say its 30,000 houses short and some saying its only 10,000 , and a Government who says we need 100,000 plus the 120,000 we would have built anyway over 10 years .

Its a shambles .

I agree their poor math and other political motivations are slow taking over but National policy is responsible for this election outcome.

Just consider for a moment, if National had clamped down on foreign land ownership, slowed and better managed immigration's caustic effect on Auckland, and stopped NZ rivers and lakes becoming a gigantic cow toilet they would still easily be the government.

Hahahaha ... so now having a CoLs in power is National's Fault ?,
having noobs with poor math at the helm is National's Fault ? ... lol is that buyers remorse or ...?

Very Average analogy ... but you made my day with this one !

Well they must have done something wrong to
Lose the election. The fact is that 'the middle' rules NZ politics and the nats had neglected the poorer half of the middle in NZ... to their peril

They upset an old goat. End of story. Now his support is fragmented it’s a new game. Still a big ask to go past 50% but we live in hope.

The posturing bovver boy Twyford has fallen flat on his face, polls show the anger at Peters perfidiousness and let them out Little is demonstrating how out of touch he is with middle NZ. Kiwis are patient people who give pollies a long leash but it’s not endless. The CoL circus will continue to produce a supply of clowns and the fairy princess is yet to be seriously tested. But it will occur and then we’ll see just how strong the media promoted Jacinda mania really is. Once we get the fawning baby stories behind us, the real game will begin.

Well, great comments all ...
This CoL better change its attitude and perceptions before the Elephant becomes a Dinosaur !

Better do what is right than say " Sorry, we were wrong " later.

Eco - all those great comments then nek minut....

Eco Bird is correct - and an astute guy.

The problem for Jacinda is that business has never trusted left-wing governments.

If that is going to change, Labour will first need to show that it's business-friendly - and over a sustained period of time.

Note that business compliance costs and taxes go through the roof under Labour governments. The combination of the two heavily undermines business confidence - no wonder businesses run scared of Labour governments.


TTP, if only the Coalition were to introduce a "blowhole" tax. You and your ilk would pay dearly but Grant would balance the books!

Yeah the Ntas were great for business, created a $100 million meth industry from nothing. Brilliant. And Twyford ruined it by asking for a report that took 2 weeks to produce.

Pales with their lates effort..the 1 Billion bovine disease that hatched under their watch. I guess thats being business friendly if youre a vet.

But the national government didn't learn after 9 loooong years, so be patient

the Crash is coming.

A CoL own goal.

And a perfect time to go on maternity leave.