Pricing indicators and inflation expectations were little changed, but there was a surprising seven-point jump in cost expectations.
ANZ Research said the survey showed more signs of demand recovering, with the first decent lift in past activity, which is the best GDP indicator in the survey.
“At precisely zero it’s certainly not strong in level terms, but it’s clear that the economy has turned a corner. Thank goodness, one would have to say, after the very weak third quarter GDP outturn,” said ANZ.
Greg Smith, head of retail with Devon Funds Management, said the latest GDP data showed the economy was in a tough place. It confirmed that the Reserve Bank was right to cut the official cash rate by 0.5% (last month) but “maybe it should have thought more seriously about a bigger reduction”.
“The Reserve Bank was very aggressive in hiking interest rates and the economy is paying the price. But it hasn’t been as quick in bringing them down. It takes time for rate cuts to feed through, and our economy is just not growing,” Smith said.
There was a sell-down on Wall Street after the US Federal Reserve cut its official rate by 25 basis points to 4.25-4.5% but said it would slow the pace of rate deductions to probably two next year, instead of the expected four.
The Dow Jones Industrial Average plunged 2.58% or 1123 points to 42,326.87 points for its 10th successive fall – the worst losing streak since 1974. The S&P 500 declined 2.95% to 5872.16 points and Nasdaq Composite fell 3.56% to 19,392.69.
Across the Tasman, the S&P/ASX 200 Index had fallen 1.84% to 8156.8 points at 6pm NZ time.
Many of the blue-chip stocks were hit. Auckland International Airport was down 14.5c or 1.75% to $8.14; Chorus declined 18.5c or 2.05% to $8.82; Mercury Energy decreased 13c or 2.12% to $6; and Infratil shed 24c or 1.94% to $12.12.
Port of Tauranga declined 15c or 2.31% to $6.35; Spark was down 6c or 2.09% to $2.81; Turners Automotive decreased 14c or 2.55% to $5.35; Skellerup eased 16c or 3.13% to $4.95; and Fletcher Building shed 11c or 3.83% to $2.76.
A2 Milk was up 10c to $6.43; Seeka increased 14c or 4.59% to $3.19; T&G Global gained 7c or 4.86% to $1.51; Rakon improved 2c or 3.57% to 5c; Eroad added 4c or 4.17% to $1; and Radius Residential Care rose 2.7c or 14.36% to 21.5c.
Napier Port increased 10c or 4% to $2.60 after telling shareholders at the annual meeting that it is “back on track with a steady recovery in (cargo) volumes” following the impact of Cyclone Gabrielle.
The port company provided full-year operating earnings guidance of $55m-$59m compared with $52m, a 39.5% increase, in the previous year.
Manuka honey producer Comvita was up 2c or 2.53% to 81c after confirming its bank syndicate has prepared a revised covenant package for the second quarter of the 2025 financial year. Comvita’s share price is at a 15-year low.
Comvita, in the middle of restructuring including cutting two regional chief executive roles, told the market it will have a half-year net loss of $6.5 million-$7.5m compared with a loss of $3.2m in the previous corresponding period.
The company had been impacted by suppressed consumer spending and deep discounting by entry-level honey labels.
Winton Land, down 1c to $1.85, is delaying the Northbrook Wynyard Quarter project in Auckland for 12 months and instead is accelerating the Northbrook retirement villages in Arrowtown and Wānaka, which is due to open in May.
Winton will complete the current preparation work at Wynyard Quarter but said “It’s a big project for us and we want to get the timing in the cycle right”. Pre-sale buyers can stay in at the current prices or seek a refund of their deposit plus any interest.
