The latest NZIER Quarterly Survey of Business Opinion (QSBO) shows a deterioration in business sentiment and activity. The survey was open from 28 November 2022 to 9 January 2023 and captured the effects of the more hawkish than expected November Monetary Policy Statement (MPS) on 23 November. In this MPS, the Reserve Bank of New Zealand (RBNZ) indicated that it would take interest rates higher than initially expected to rein in inflation.
On a seasonally adjusted basis, a net 73 percent of businesses expect general economic conditions to deteriorate over the coming months – the weakest over the survey’s history. When it comes to activity in their own business, a net 13 percent of firms reported a decline in activity over the past quarter. This was the weakest since June 2020 survey when the full impact of the first COVID-19 lockdown was captured.