New Zealand Business Confidence Edges Higher in October as Firms Signal Price Pressure

New Zealand business confidence edged higher in October, but companies continued to report significant cost pressure and a greater willingness to raise prices, according to a new ANZ Business Outlook survey released on Thursday, October 29.

The headline confidence measure rose to a net 52.5%, from 51.9% in September, according to ANZ's survey and independently reported economic data. A positive net balance means more respondents expect general economic conditions to improve than deteriorate over the coming year; it does not mean only 52.5% of all businesses are optimistic. ANZ rounded the latest reading to +53, an increase of one point.

Businesses were somewhat less upbeat about their own prospects. The net share expecting their own activity to increase eased to 46.2% from 47.9%, according to independent reporting on the survey, or about +46 in ANZ's rounded figures. That divergence suggests general economic optimism has not translated into an equivalent improvement in every firm's expectations.

There was a firmer signal from activity already experienced. ANZ said its measure of reported past activity rose four points to +15, indicating that more surveyed firms described activity as stronger than a year earlier. The survey measures perceptions and intentions, rather than directly counting national output or employment.

Price pressures remained a notable feature of the October responses. ANZ said one-year inflation expectations were steady at approximately 3.3%, while a net 82% of businesses expected higher costs. The share intending to increase selling prices in the next three months climbed four points to a net 52%, the highest reading since May. The average price rise firms anticipated was 1.9%, its highest since June.

The combination leaves policymakers and businesses with a mixed picture: improving assessments of current trading conditions alongside cost and price-setting intentions that could complicate inflation control. Those intentions are not a forecast that consumer prices will rise by the same amount; actual outcomes depend on demand, competition and whether firms implement their plans.

The October survey followed a volatile period for global energy prices. ANZ's results describe resilience in business sentiment despite that uncertainty. Future releases will help show whether reported activity continues to strengthen and whether planned price increases become actual changes in what customers pay.