Steady inflation gauges may calm RBNZ nerves ahead of October review
New Zealand business confidence edged lower in September as a mid-month surge in oil prices weighed on firms that answered after the fuel spike. Inflation indicators, however, held firm, a result economists say should reassure the Reserve Bank (RBNZ) ahead of its October decision.
Headline confidence slipped to 51.9 from 53.7 in August, while firms' expectations for their own activity were little changed at 47.9, according to the ANZ New Zealand Business Outlook for September. Reported activity compared with a year earlier fell to 10.8, from 16.4.
"The bumpy recovery continues," ANZ economists said.
Inflation contained as construction picks up
For advisers watching mortgage rates, the inflation readings were the key result. One-year inflation expectations were steady at 3.25%, and the share of firms planning price rises fell to a net 48.4% from 51.0%, even as cost expectations inched up.
Writing in Westpac's first impressions of the September survey, senior economist Satish Ranchhod said the muted reaction to higher fuel prices "will help to calm nerves at the RBNZ." The central bank lifted the official cash rate to 2.75% on 2 September, and its next review is due in October.
Residential construction intentions improved to 22.2 from 15.5, though firms' expectations for ease of credit turned slightly negative, at -0.3.
Late responses reveal the oil shock
Three in four firms answered in the first days of the month, with the rest replying only after a reminder was sent on 22 September. In between, Dubai crude rose from US$100 a barrel to a peak of US$128, before easing to US$111 by the reminder date.
Those later responses were noticeably weaker. Expected own activity sat at 52 among early respondents but 36 among late ones, and reported employment against a year earlier was +5 among early respondents but -23 among late ones.
Ranchhod said the overall picture remained resilient, though "hiring intentions did take a noticeable step down following the fuel spike", a trend he flagged as one to watch.
ANZ said how businesses respond to renewed uncertainty will shape the rest of 2026, warning that "waiting for certainty is a decision to do nothing for potentially a long time."
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