New Zealand business confidence worsens as COVID continues to impact

By Lucy Craymer

WELLINGTON (Reuters) -New Zealand business confidence and demand worsened in the first quarter of this year due to the ongoing damage the COVID-19 outbreak is having on the economy, a private think tank said on Tuesday.

A net 40% of firms surveyed expected general business conditions to deteriorate compared with 28% pessimism in the previous quarter, the New Zealand Institute of Economic Research’s (NZIER) quarterly survey of business opinion (QSBO) showed.

On a seasonally adjusted basis, 33% expected business conditions to worsen, versus 35% pessimism recorded in the previous period. The survey’s measure of capacity utilisation rose to 97.1%, from the previous quarter’s 92.7%.

The manufacturing sector is the least pessimistic of the sectors survey but still face many challenges as Omicron’s spread impacts deliveries, NZIER said in its report.

A net 56% reported increased costs in the March quarter, it said. Overall, businesses are feeling more cautious in an environment of acute labour shortages and intense cost pressures, the report said.

(Reporting by Lucy CraymerEditing by Chris Reese and Sandra Maler)