New Zealand business confidence remained in the doldrums in November with headline sentiment and firms' views of their own activity largely unchanged from the previous month.
A net 37.1 per cent of firms surveyed in the ANZ business outlook survey for November expect general business conditions to deteriorate in the coming 12 months, unchanged from October. Agriculture remained the most downbeat sector, followed by retail.
Firms' views of their own activity, which is more strongly correlated with actual economic performance, remained positive, with a net 7.6 per cent predicting increased activity versus 7.4 in October.
"Nationally, business sentiment indicators appear to be in something of a holding pattern," said ANZ chief economist Sharon Zollner.
Business and consumer confidence have tumbled since the 2017 election but the sour sentiment has been belied by strong economic data.
Zollner said the ANZ survey appears to have been "overstating the strength of the current headwinds for growth, given the resilience seen in the 'hard' economic data."
However, it also reflects that businesses are experiencing a "mixed bag" at the moment with solid demand offset by concerns about costs, the ability to pass those on and capacity constraints, she said.
The ANZ's October survey found that a net 28.2 per cent of firms intend to raise prices, versus 32.2 per cent in October.
Inflation expectations lifted slightly to 2.29 per cent versus 2.22 in the prior month.
Meanwhile, a net 4.1 per cent of firms expect to reduce investment in the year ahead, versus 3.3 per cent.
Today's survey showed employment intentions improved, with a net 2.2 per cent planning to increase headcount versus 0.3 per cent in October.
Profit expectations remained weak at a net negative 13.5 per cent, versus negative 15.3 per cent expecting lower profits when surveyed in October.
Construction intentions improved significantly, with residential construction intentions at 29.2 per cent versus 4.5 per cent in the prior survey, while commercial construction intentions were a positive 16.7 per cent from a negative 23.8 per cent in the prior survey.
"It was encouraging to see a bounce back in both residential and commercial constructions in November. The data can be volatile, but the pick-up in commercial construction intentions was particularly notable. The rebound was focused in Auckland; Canterbury remains weak," Zollner said.