Confidence among small firms has fallen to an all-time low.
A survey from MYOB earlier this week found that small business confidence had improved between March and June, and negativity halved from -71 per cent in March to -35 per cent in June.
But the latest measure of small business confidence by ANZ has found that confidence has plunged as the coronavirus pandemic largely decimated activity.
ANZ's composite growth measure - which takes into account firms' views on growth indicators including activity, hiring, profit and lagged investment intentions, and is a proxy for GDP growth – sank to its lowest-ever level since measuring this data began in 1999.
A halt in activity among firms as a direct result of Covid-19 pushed the composite measure 14 percentage points lower to -24 points in the June quarter, but there were early signs that the September quarter would see a return of positivity.
The ANZ Business Micro Scope found that a net 48 per cent of businesses surveyed were pessimistic about the general business conditions in the year ahead.
Small firms' expectations of their own activity fell 29 per cent in the June quarter, with 38 per cent of firms anticipating a slowdown in activity in the year ahead.
Retail firms were found to be the least optimistic about trading conditions ahead.
Like the MYOB Snapshot Survey found, the agriculture sector was the most optimistic, although 32 per cent of those surveyed anticipated a fall in activity.
Hiring intentions slumped in the quarter and 36 per cent of firms expected to lay off staff over the next year - this was at a historic low, as was investment intentions by firms.
A net 30 per cent of small firms expected to reduce their investment over the next 12 months and 58 per cent of firms expect profits to deteriorate.
North Island based firms were found to be the gloomiest of all.
The Micro Scope found early July figures suggested some improvement.