New Zealand business confidence slipped from a 20-year high in March, while remaining at elevated levels consistent with broad economic momentum.
A net 67.3 percent of firms are optimistic about general business conditions this month, down from 70.8 percent in February, which was the highest level since March 1994, according to the ANZ Business Outlook survey. Confidence across all major subsectors was above 50 percent, a sign of broad-based economic expansion.
Firms expecting to raise prices declined to 30.2 percent from 32.9 percent, while inflation expectations rose to 2.61 percent, from 2.57 percent in February, and the expectation of interest rate increase decline to 85.7 percent from 90.2 percent the previous month.
The slight easing in confidence comes after the Reserve Bank of New Zealand became the first western central bank to raise interest rates to prevent the build-up of inflationary pressures in the economy.
Despite currency headwinds export intentions bucked the decline and rose to 32.3 percent from 31 percent.
"There are frictions and tensions to manage," ANZ Bank New Zealand chief economist Cameron Bagrie said of the rising inflation, increasing interest rates and strong currency. "We're after enduring economic expansion, as opposed to being left gasping by a flash in the pan growth spurt."
Firms' expectations of their own business eased to 58.2 percent from 58.5 percent the previous month. Expected profitability slipped 3.6 points to 40.1 percent. A net 26.6 percent expected to hire more staff, down from 32.4 percent in February, but buoyed by 44.4 percent hiring expectation in construction.
Investment intentions fell to 30.7 percent from 35.2 percent.